The defence spending of Vietnam is anticipated to be $5bn in 2018 and is expected to reach $7.1bn by 2022, at a compounded annual growth rate (CAGR) of 7.08%, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Vietnam defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022’, the report provides an analysis of the defence spending patterns of Vietnam.
Vietnam’s capital expenditure is projected to grow at a CAGR of 7.88%, while revenue expenditure is expected to record a CAGR of 6.68% over the forecast period.
The increase in the nation's defence expenditure is expected to be driven by territorial conflicts in the South China Sea and military modernisations plans to replace its existing obsolete equipment.
Vietnam plans to acquire a number of fighter and multi-role aircraft, naval ships, patrol vessels, maritime patrol aircraft, submarines and surveillance equipment in the near future.
In addition, slow population growth is anticipated to raise per capita defence spending from $53.4 in 2017 to $72.5 by 2022, the report notes.