Persistent security concerns over Russia's military assertiveness, which has historically fueled Bulgaria's defense expenditure, is likely to continue to drive future increases. GlobalData, a leading data and analytics company, forecasts that defense spending in Bulgaria will reach US$2.1bn in 2026, growing at a compound annual growth rate (CAGR) of 10.58%.
GlobalData's latest report, 'Bulgaria Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2026', reveals Bulgaria's defense spending has risen since 2017, growing at a CAGR of 15.27%, from US$0.7bn in 2017 to US$1.3bn in 2021.
Despite the economic impact of the COVID-19 pandemic, geopolitical drivers for defense investment persist, and continue to necessitate budget growth. The spending increase is driven by Bulgaria's commitment to attaining the 2% of GDP target set by the North Atlantic Treaty Organization (NATO). Bulgaria has produced a spending plan, which will enable the country to reach this target in 2024, with an increasing proportion of GDP being spent on defense annually leading up to 2024.
Vera Lin, Aerospace and Defense Analyst at GlobalData, comments: "Bulgaria's increased defense spending trend driven by security concerns, such as the Russian military build-up, places it alongside NATO-aligned Eastern European states aiming to modernize their armed forces to cooperate within the allied framework. Bulgaria has been endeavouring to reduce its reliance upon Russian suppliers for arms and MRO services, and instead procure Western alternatives, which will increase Bulgaria's capacity to participate in NATO missions."
In the air domain, the need to transition from Russian platforms to Western alternatives has driven Bulgaria to procure F-16s from the US. Similarly, in the land domain, the procurement of 98 Guardian Armored Vehicles has been driven by the target of developing a mechanised brigade that can collaborate with NATO partners.
Over 2022-2026, Bulgaria is expected to cumulatively spend US$2.2bn on acquisitions, and US$8.9bn on defense expenditure overall. The Bulgarian Ministry of Defence had outlined its procurement and modernization plans for the period up to 2014-2020, with BGN ??.2bn (US$1.5bn) to be allocated to 13 major new projects and 29 ongoing projects; while up to 40 additional projects may be executed depending on future availability of funds.
ENDS
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Notes to Editors
Quotes provided by Vera Lin, Associate Analyst at GlobalData
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