GlobalData : DevFrance’s defense budget continues to grow as acquisitions expenditure expected to rise by 30% over the next five years, says GlobalData
May 30, 2022 at 04:53 am EDT
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30 May 2022
France's defense budget continues to grow as acquisitions expenditure expected to rise by 30% over the next five years, says GlobalData
Posted in Aerospace, Defense & Security
As the French military's various acquisitions programs in the land domain continue to deliver new systems on time and on budget, growing confidence in the French defense industry has driven the continued growth of both the defense budget and expenditure on new acquisitions, observes GlobalData.
The leading data and analytics company notes that projects within the SCORPION program, which has delivered hundreds of armored vehicles since its inception in 2014, are expected to receive follow-on orders for hundreds of additional units of various platforms such as the EBRC Jaguar, VBMR-L Serval and VBMR Griffon following the implementation of the Military Planning Law (MPL) 2019-2025, which outlines France's defense budgets and strategic objectives over a seven-year period.
GlobalData's latest report 'France Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2022-2027' reveals that France's defense budget is forecast to grow from $50.3 billion in 2022 up to $68 billion by 2027. Though total budget allocations saw significant growth in the historic period, this level of growth is expected to slow over the coming years due to the gradual optimization of manufacturing processes coupled with the end of costly Research & Development investments.
Tristan Sauer, Land Domain Analyst at GlobalData, comments: "The French government has long expressed a particular preference for sourcing defense material from domestic or state-owned companies due to concerns over national security and supply chain vulnerability. This factor has further facilitated the growth of the French defense acquisitions budget, as the significant expenditure required by programs such as SCORPION, which will cost an estimated $6.8 billion over 11 years, is more politically palatable due to the fact that this investment will support France's growing defense industrial base."
A cursory analysis of the composition of France's defense budget indicates that financial allocations for acquisitions have grown exponentially over the past four years, rising from $12.1 billion in 2018 to reach $17.3 billion in 2022. GlobalData's forecasts indicate that this trend is likely to continue over the next three years, with current projections indicating that France's defense acquisitions budget could reach an estimated $22.5 billion in 2027.
Sauer adds: "Despite the aforementioned preferential treatment for French defense firms, the French military's expansive list of requirements has meant that major foreign suppliers have also benefitted from the continued growth of the French defense budget. Indeed, the US dominates the French defense imports market, with US-based companies accounting for 42% ($261 million) of the total imports market between 2017-21, followed by the UK with 16% ($98 million) and Brazil with 15% ($92 million)."
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GlobalData plc published this content on 30 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2022 08:51:43 UTC.
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GlobalData : DevFrance’s defense budget continues to grow as acquisitions expenditure expected to rise by 30% over the next five years, says GlobalData