Thailand’s annual defence spending is valued at $5.7bn in 2016 and is anticipated to reach $6.9bn by 2021, following a compound annual growth rate (CAGR) of 4.06%, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Thailand Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021’, the report provides insights of the defence spending patterns of Thailand, the second-biggest economy and the fourth-richest nation of Southeast Asia.
The budget allocation for capital expenditure is anticipated to be $2.9bn from 2017-2021, whereas revenue expenditure is expected to reach $3.8bn by 2021. Half of the budget is to be allocated to the army, while the average apportionments for navy, air force and other segments are anticipated to be 19.6%, 18.2% and 12.8%, respectively.
Military modernisation programmes, territorial conflicts with neighbouring countries, and arms races among Asian countries are expected to be the key driving factors of Thailand’s defense spending growth.
The modernisation of military forces is anticipated to attract investment in acquisition programmes, including those of main battle tanks (MBTs), multi-role aircraft and helicopters, submarines, frigates, patrol vessels and unmanned aerial vehicles (UAVs), states the report.