Defense spending across globe hinges on geopolitical situation, study says
AMSTERDAM. The total global defense budget -- estimated at approximately $1.8 trillion in 2020 -- is expected to grow to around $2.3 trillion by 2028, a combined annual growth rate (CAGR) of nearly 2.8%, according to a new study by Market Forecast, "Global Defense Budget Analysis -- Forecast to 2028."
The study authors assert that countries' geopolitical situation plays an important role in defense spending, saying that find that countries with a strained relationship with neighboring nations are likely to spend more on their defense budget: A government of a country with a 30% risk of expected civil war within five years is expected to raise its spending by around 1.2% of GDP when compared with another country without an evident risk.
North America is expected to have the highest defense budget by the end of the forecast period, say the researchers.
One of the major challenges to the defense industry over the next several years, according to the study, will be technology imitation or theft of sensitive design data, which takes away a critical advantage from the nation who developed the original technology.
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