© raytheon (illustration purpose only) Analysis | February 03, 2017
2016 kicks off decade of growth?
"Fueled by an increasingly uncertain security environment and growing international pressure, Western European defence spending increased for the first time since 2009 and we expect growth to continue to strengthen over the next decade", writes IHS Markit.
After a lackluster 2015, global defence spending rose in 2016 to USD 1.57 trillion, kicking off what is forecast to be a decade of stronger global defence expenditure, according to the annual Jane’s Defence Budgets Report released today by IHS Markit. “Defence spending returned to a healthy rate of growth in 2016, kicking off what we expect to be a decade of stronger global defence spending,” said Fenella McGerty, principal analyst, IHS Jane’s. “Defence spending should recover to pre-financial crisis levels by 2018.”
*For this study, values based on constant 2016 US dollars.
- Asia Pacific (APAC): The gradual shift in focus from territorial defence to power projection could prompt even faster budget growth in APAC in the medium term.
- China: China’s defence budget will almost double within 10 years -- from $123 billion in 2010 to $233 billion in 2020. By 2020, China’s defence budget will be about four times bigger than the UK’s and more than the entire Western European regional defence spend combined.
- India: In 2016, India overtook Saudi Arabia and Russia to become one of the top five defence spenders globally for the first time.
- Middle East: Instability has ensured that defence spending continues to be protected from significant cuts, despite the budgetary constraints caused by low oil prices.
- NATO: NATO defence expenditure increased for the first time since 2010 in response to growing strategic challenges posed by the Islamic State and Russia.
- Western Europe: Security concerns add approximately $10 billion to defence budgets across the region over the next five years. A weak pound could see India overtake the UK by 2018.
- Baltics: Tensions with their neighbour Russia boosted defence spending from $981 million in 2014 to $2.1 billion by 2020. The region is starting from a small number, but is growing faster than any other.
- US: The US defence budget represents about 40 percent of the total global defence budget. Since 9/11 over $9.35 trillion has been allocated to the US defence budget.
|Rank 2015||Country||Spending||Rank 2016||Country||Spending|
|1||United States||615,746||1||United States||622,035|
|3||United Kingdom||53,532||3||United Kingdom||53,811|
|5||Saudi Arabia||50,531||5||Saudi Arabia||48,686|
|10||Korea, South||32,275||10||Korea, South||33,477|
|Top 10 Total||1,153,467||Top 10 Total||1,170,674|
|Rank 2015||Country||Spending||Rank 2016||Country||Spending|
|14||United Arab Emirates||18,584||14||United Arab Emirates||19,063|
|Top 20 Total||1,322,341||Top 20 Total||1,338,358|
|Global Total 2015||1,553,612||Global Total 2016||1,568,440|
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