TAIPEI: Taiwan’s defense expenditure is expected to register a CAGR of 2.90% during the forecast period to reach US$12.1 billion by 2022
Taiwan’s military expenditure stands at US$10.2 billion in 2017 and is projected to register a CAGR of 2.90% during the forecast period to reach US$12.1 billion by 2022. The main factors driving this growth are the rapid modernization of the country’s armed forces in recent years and the People’s Republic of China’s (PRC) assertiveness with regards to territorial claims.
The capital expenditure allocation, which stood at an average of 17.9% during the historic period, is estimated to increase at an average of 18.8% over the forecast period, primarily due to the country’s procurement contracts of corvettes, diesel-electric submarines, missile defense systems, and multi-role aircraft. Consequently, revenue expenditure is expected to decrease from an average of 82.1% during the historic period to an average of 81.2% over the forecast period.
Taiwanese defense imports witnessed substantial growth over the period 2012,2016. Imports in 2012 were low due to delayed deliveries by the US, which was under pressure from the People’s Republic of China (PRC), however, to compensate this; Taiwan started importing engines from Germany. During the forecast period, the US is expected to remain the largest exporter of defense equipment as other countries are reluctant to supply military equipment due to pressure from the People’s Republic of China (PRC). The country’s imports were highest in 2014 due to the procurement of air defense systems, missiles, and aircraft.
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