The global economic downturn that began in 2008 didn’t just affect consumer businesses. The effects of the recession reached all the way to the most sacred of government spending initiatives – military spending. Global defense budgets have been falling since 2009.
Now, with many economies recovering, defense budgets are back on a rising trajectory. Market research firm IHS today released a report predicting that defense budgets in 2014 will rise year-over-year. The IHS report estimates that global defense spending will hit $1.547 trillion this year, up 0.6% from the $1.538 spent last year.
The report also shows that much of the increase in defense spending will come (like the consumer tech market) in emerging economic markets. China, Russia, and countries in the Middle East are all set to significantly increase defense spending in the coming years while western nations are predicted to continue seeing defense budget decreases.
“We have seen a rapid acceleration of defense spending in the Middle East since 2011,” said Fenella McGerty, senior analyst at IHS. “Four of the top five fastest growing defense markets in 2013 were Middle Eastern countries. If we stretch to look at the top 10 fastest growing markets, six of the 10 were in the Middle East. Oman and Saudi Arabia in particular have seen rapid growth of over 30% between 2011 and 2013. Since 2011, Oman’s defense budget has now increased by 115%, from $4.7 billion to $9.2 billion in nominal terms.”
Image via U.S. Department of Defense