Worldwide Defense Spending Forecast to Reach $1.67 Trillion in 2018

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Growth in Asia-Pacific – a region that has experienced robust growth over the last decade – slowed this year to its lowest rate since 2010 due to smaller increases in China and India and cuts to spending in South East Asia.

“While we saw a distinct slowdown in 2017, the foundations remain in place for robust increases to return over the next two years. We still expect Asia-Pacific to be behind the driving force behind long term growth in global defense spending,” Caffrey said.“Economic growth is still the main factor behind rising spending in Asia-Pacific, but we’re starting to see strategic factors play a more prominent role. In recent years Chinese actions in the East and South China Sea, the North Korean ballistic missile threat and insurgencies throughout South East Asia have all caused additional funding to be diverted towards defense,” Caffrey said.

Middle East returns to growth due to geopolitical challenges

Following a reduction in 2016, defense spending returned to growth in the Middle East and North Africa this year. Crucially, Saudi Arabia – the largest defense spender in the region – increased its defense budget in 2017 after cutting spending the previous year.

“Fiscal consolidation is still occurring in a number of key states in the region following the collapse in oil prices; however the challenging security environment has seen defense budgets protected from cuts in most cases. We expect defense budgets to continue to increase going forward but growth will be constrained by a more cautious approach to government spending,” Caffrey said.

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About the Jane’s Annual Defense Budgets Report

The Jane's Defense Budgets team produces the annual Jane’s Defense Budgets Report every December. The report examines and forecasts defense expenditure for 105 countries and captures 99% of global defense spending.

The Jane’s Annual Defense Budgets Report is the world’s most comprehensive, forward-looking study of government’s defense budgets. Tracking 99% of the global defense expenditure from 105 of the world’s largest defense budgets, data is compiled from Jane’s Defense Budgets online solution platform. It includes five-year forecasts, historical data, budget charting, trend evaluation and in-depth analysis by country. In this study, values are based on constant 2017 US dollars.

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