Indonesian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024
Indonesian defense expenditure is forecast to value US$8.2 billion in 2020 and is expected to grow at a CAGR of 3.39% during the forecast period to value US$9.4 billion in 2024. Over the next few years, Indonesia wants to be recognized as a major regional military power. The economy has been growing at an average rate of 5.51% historically, and this has fueled growth in the defense expenditure.
The Indonesian MoD is expected to increase its capital expenditure from US$2.3 billion in 2019 to US$3.1 billion in 2024 in an effort to modernize its armed forces and support existing projects. Various procurements, which have led to the increase in capital budget allocation, include NASAMS ground based air defense system, Bell 412EPI, Airbus H225M helicopters, TPE331 turboprop engines, Type 209 submarines, Sukhoi Su-30MK2s aircraft, Su-27 SKM, and Su-35 “Flanker” fighters, AS565 Panther anti-submarine warfare (ASW) helicopters, Chang Bogo-class conventional submarines, two landing ship tanks (LSTs), AH-64 Apache Longbow gunship helicopters, and German Leopard tanks.
Over the forecast period, the country is expected to invest in infrastructure construction, multi-role aircraft, naval vessels such as submarines and frigates, cyber security, border security, unmanned aerial vehicles, radar systems, and computer network defense capabilities, which will drive the growth in its expenditure.
With a population of over 265 million and 17,000 islands to protect, homeland security has gained prominence in Indonesia over the last decade with expenditure expected to increase from US$7.7 billion in 2019 to US$9.4 billion in 2024 at a CAGR of 3.39%. Increasing defense expenditure will support the Indonesian government's commitment to address the increasing threat of terrorism, and to manage piracy and illegal fishing, illegal immigration, etc.
Indonesia has often been regarded as one of the most attractive defense markets in Southeast Asia as it deals with terrorism, illegal fishing, piracy, drug smuggling and other crimes. The country is one of the fastest-growing defense markets in South Asia and has historically relied on foreign OEMs (original equipment manufacturers) to strengthen its defense capabilities. The country imports its tanks from Germany and frigates, corvettes, submarines etc. from the Netherlands, the UK, and Germany. Indonesia imports all of its fighter aircraft including F-16 and F-5 fighter jets from the US and Sukhoi jets from Russia.
The report Indonesian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024, offers detailed analysis of the Indonesian defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
Companies mentioned: PT Dirgantara Indonesia, PAL Indonesia, PT Pindad, Dok & Perkapalan, PT Dahana, PT Multiintegra, PT SOG Indonesia
In particular, it provides an in-depth analysis of the following -
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