Vietnam’s military expenditure expected to be US$7.6 billion by 2023
The Vietnamese Government allocated US$5.4 billion towards military expenditure in 2018, of which 32.2% is earmarked for the procurement of defense equipment. The country’s defense expenditure increased at a CAGR of 6.14% over 2014–2018. The growing strength of the Chinese Navy and its assertiveness with regards to territorial claims in the South China Sea has compelled the Vietnamese Government to enhance its military capabilities.
In addition, the country is in the process of addressing its limitations with respect to combating modern threat scenarios with its existing obsolete equipment, and has embarked on military modernization plans over the last few years. These plans are expected to pick up pace over the forecast period and drive Vietnam’s defense expenditure. In the coming years, demand for defense equipment is mainly expected to revolve around fighter and multi-role aircraft, naval vessels, patrol ships, maritime patrol aircraft, submarines, and surveillance equipment.