BOSTON, Aug. 3, 2015 /PRNewswire/ -- Reversing a trend which saw global defense budgets remain essentially flat year-on-year across 2012-2013, defense spending experienced a sharp increase in 2014 as a result of a changing geopolitical threat environment based on both state and non-state activity and other factors. The Strategy Analytics Advanced Defense Systems (ADS) service report, "Global Defense Spending Outlook 2014-2024," Strategy Analytics forecasts that global defense spending will increase 2 percent year-on-year in 2015 and will grow at a CAGR of almost 3 percent to reach $2.4 trillion in 2024.
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A range of factors will drive spending but there are a number of common drivers that recur within and across the different regions which we believe will underpin future spending on defense including:
- Combatting the expansion of ISIL (ISIS, IS) and other asymmetric threats
- Contesting the ambitions of a resurgent Russia.
- Maintaining spending levels in line with NATO and other coalition commitments.
- Maritime and border protection.
- Developing effective strategies to counter China.
"While the North American defense budget will represent the largest spend, the rate of growth will be hampered by the continuing impact of sequestration despite being offset by discretionary supplementary spending in the medium- and long-term," predicts Asif Anwar, Director of the ADS service. "On the other hand, we forecast defense spending will continue to accelerate in the Asia-Pacific region, growing at the fastest CAGR globally of 5.6 percent and surpassing North American spend levels by 2020."
"This year's analysis expanded coverage to eighty-nine countries, looking at a range of factors including GDP growth, threat perception and political intent on force modernization and indigenization of the local defense industry over the short-, medium- and long-term," noted Eric Higham, North American Director for ADS. "We've also segmented the spending to focus on procurement and support contract expenditure providing the defense spending outlook that is available to the industry through contracts for platforms, systems, subsystems and enabling technologies. We forecast this available market will grow to $767.2 billion by 2024."
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