The global defense budget reached around USD 2 Trillion in 2020. As compared to the year 2019, a 2.6% increase in military expenditure was observed worldwide. The rise in military spending is a subsequent impact of the growth in GDP contribution. The global military spending for the year 2020 was poised to be roughly 2.4% of the GDP. The military-based GDP expenditure rose by a value of 0.2% as compared to the year 2019. According to public sources like SIRPI, the military expenditure for the year 2020 experienced the biggest rise since the financial and economic crisis faced in 2009.
One of the key factors which are expected to drive the military budget in the year 2021 is the occurrence of armed conflicts across 39 states (In 2020). As compared to the year 2019, the number of armed conflicts increased across 5 additional states in 2020. On a regional basis, the number of conflicts within Sub-Saharan Africa is seen to be the highest. The overall growth in geo-political conflicts across the world is hereafter anticipated to support the expansion of defense spending globally.
The US is one of the key military spenders within the global defense scenario. US defense spending accounted for majority of the global military expenditure with a value of around USD 778 Billion in 2020. The US defense budget 2020 was recorded to increase by a value of 4.4% as compared to the year 2019. In the year 2020, the US defense budget amounted to roughly 11% of federal spending. The US defense budget 2021 was recorded to be USD 753.5 Billion. The Mandatory DOE spending for the US defense budget 2021 was recorded to be USD 10.77 Billion. While, the defense related spending attained a value of USD 37.335 Billion. An increase in value from USD 705.39 Billion to USD 753.5 Billion was observed between the Department of Defense’s discretionary budget authority and the actual US defense budget 2021. The overall growth in US defense spending and its impact on the global defense atmosphere can be studied using US Defense Outlook 2021-2026.
The US Defense Outlook 2021-2026 is now available for FREE download. The brief report on US defense outlook 2021-2026 covers the forecasted defense budget for the above said period. The key land programs, Naval programs and Air Force programs are covered in the report. The key ongoing land program is the Joint Light Tactical Vehicle Program (JLTV).
According to the US Defense Outlook published by Aviation and Defense Market Reports (A&D Market Reports), one of the key factors to drive the military expenditure within the US is the ongoing conflict between the US and China. The power struggle between these two nations is poised to boost the military expenditure for both parties involved. An increase in modernization programs is another factor that is poised to propel market growth. As of FY 2022, the US market is anticipated to retire roughly 201 old aircraft. The cost of maintenance for the same is to be redirected towards R&D-based programs. The freed funds are also to be utilized in the procurement of the next-generation aircraft. The US air force is also poised to acquire the E-7 Wedgetail to replace the existing E-3 fleet. The associate cost of fleet replacement includes inventory and training cost.
As per the US defense budget 2020, 4 focus areas for the US DOD is seen to the instating of a more lethal, agile and innovative joint force. The emerging complex security environment is one of the key factors that drove defense budget allocation for 2021. Modernization of air, maritime and land domains to enhance lethality is another factor which is poised to drive growth margins. In the US defense budget 2020, the capital allocated to base and overseas contingency operations is seen to plummet. However, a subsequent increase in Emergency operations based funding was witnessed in the US defense spending.
The US Navy’s 30-year shipbuilding plan is another factor that is anticipated to increase the fleet size for manned ships. As stated by the US defense spending, the cost of implementation for this plan is anticipated to be between USD 25-33 Billion. The rise in underwater combat abilities is another factor that is poised to boost the US Navy’s lethality. As of 2021, the Navy plans to include two additional V-Virginia attack class submarines in its existing submarine fleet.
Aviation and Defense Market Reports specializes in the commercial aviation and defense domain. The end-users of this vertical can benefit through the Global Defense Outlook 2021-2026. Users can download the FREE US Defense Budget report from Aviation and Defense Market Reports website.