Which regions are set to boost their defence expenditure in the next five years?
After global defence expenditure returned to previous levels of growth in 2014, ongoing budgetary constraints in the West is expected to result in a levelling off of defence expenditure worldwide in 2015, estimated to be around $1.6 trillion according to IHC.
Growth to return in 2016
However, growth is then expected to return in 2016 and be sustained for the remainder of the decade as fiscal consolidation efforts continue to ease in major developed economies.
According to the IHC Jane’s report, all of the world’s regions are expected to grow by 2020 with the exception of North America.
In particular, the Asian Pacific (ASPAC) region is expected to show the largest instance of defence spending growth, $415,635bn in 2015 to $547,110bn in 2020.
Asian defence expenditure
Growth in Asian defence expenditure is expected to accelerate from 3.3% in 2014 to 4.8% in 2015. Key regional markets in Asia have already outlined plans for increases in military spending, while growth in India and China is expected continue at rates above 5% in real terms in the coming years.
The strong performance of Asian economies coupled with ongoing strategic concerns in Russia, Ukraine and the Middle East are expected to sustain these rates of growth for years to come, leading to further opportunities and spending plans.
In addition, since Asia currently represents over a quarter of all global defence expenditure, this growth is expected to drive the global recovery in military spending.
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