“2016’s $1.57 trillion global defence spend is to kick off a decade of growth,” IHS Markit says.
After a lackluster 2015, global defence spending rose in 2016 to $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 by IHS Markit, a world leader in critical information, analytics and solutions.
The Middle East was the fastest growing region in terms of defence spending between 2012 and 2014. Spending dipped due to the dramatic drop in oil prices. However, even at the ‘low point’, regional defence spending in 2015 and 2016 will still be higher than 2013 figures.
“We’ve seen a pause in growth in the Gulf States as a result of the collapse in oil prices,” Caffrey said. “However, generally speaking, defence has been protected from cuts due to regional instability. In the cases of Kuwait and Qatar, we’ve actually seen significant increases in defence spending.” Interestingly the research finds that the Baltics is the fastest growing region of the areas covered by the study. Since the Ukraine crisis began, defence investment in the Baltics has doubled and will double again in the next two years.
Predictably, the US is still the world leader in defence expenditure. “Since 9/11, over $9.35 trillion has been allocated to the US defence budget, with the Overseas Contingency Operations (OCO) accounting for $1.62 trillion or 17.3 percent of the total US Department of Defense budget,” said Guy Eastman, senior analyst, IHS Jane’s. After 9/11 a buildup took place through 2010 to support operations in the Middle East and elsewhere, followed by decreasing OCO budgets and troop reductions, bringing the US Department of Defense (DoD) budget to the 2016 value of $622 billion.
The IHS Jane’s Annual Defence Budgets Report is one of the world’s most comprehensive, forward-looking study of government’s defence budgets. Tracking 99 percent of the global defence expenditure from 105 of the world’s largest defence budgets, data is compiled from IHS Jane’s Defence 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 2016 US dollars.