Increase in the country’s defense expenditure can be attributed to the deteriorating security situation in Europe, particularly in the wake of Russian aggression against Ukraine and Sweden’s efforts to increase operational war fighting capability of the armed forces. As a result, the government has decided to substantially increase defense budget for the first time in two decades. Over the forecast period, the country’s defense industry is expected to incur a cumulative spending of US$34.3 billion with most of the expenditure being directed towards the purchase of advanced defense systems, international peacekeeping missions, and research and development initiatives
– Over the historic period, defense expenditure registered a growth rate of 1.11%, increasing from US$6.1 billion in 2011 to US$6.4 billion in 2015
– Military expenditure, valued at US$6.6 billion in 2016, is expected to increase to US$7.2 billion by 2020, registering a CAGR of 2.20% over the forecast period
– Military expenditure will be driven by the threat from Russia, modernization initiatives and participation in peace keeping missions
– The Defense Ministry is expected to procure fighters and multi-role aircraft, diesel electric submarines, aviation MRO and cyber security
