Poland - Defense and Security: Accelerating the modernization of its armed forces (Strategy, Performance and Risk Analysis)
Poland scored low in terms of levels of conflict but high on associated costs. Although a peaceful nation, it faces a continuous threat from Russia which is attempting to expand its influence over Eastern Europe. In 2016, Poland was ranked 13th globally in terms of military expenditure as a percentage of GDP.
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Growing defense expenditure:
Polish defense expenditure rose from US$8.8 billion in 2015 to US$9.1 billion in 2016. It will post a forecast-period CAGR of 5% to reach US$11.3 billion in 2021. Modernization plans, the procurement of equipment, the formation of armed civil forces, and peacekeeping initiatives under its membership of NATO will drive defense expenditure. Revenue expenditure increased from US$5.1 billion in 2015 to US$6.5 billion in 2016 and will post a forecast-period CAGR of 5.1% CAGR to reach US$6.9 billion in 2021, driven by the country’s focus on advanced military training programs.
Homeland security and aircraft categories to drive capital expenditure:
In Poland, capital expenditure for aircraft stood at US$514.6 million in 2016 and will post a forecast-period CAGR of 3.1% to reach US$656.2 million in 2021, driven by the replacement of the Sukhoi Su-22 and Mikoyan MiG-29 with F-16s and F-35s. In 2016, Poland registered a capital expenditure of US$600.3 million on homeland security which will post a forecast-period CAGR of 2.6% to reach US$678.4 million in 2021. The country’s efforts to adopt new technologies to counter cybercrime and bolster infrastructure protection measures will drive expenditure.
Missile defense system expenditure:
Capital spending on missile defense system will post a forecast-period CAGR of 4.1% to reach US$436.0 million in 2021. Conflicts with Ukraine prompted the Polish MoND to strengthen its systems. To this end, it has also ordered 70 AGM-158B Joint Air-to-Surface Standoff Missiles with Extended Range (JASSM-ER) from Lockheed Martin at a cost of US$200.0 million. By 2022, Poland aims to purchase six batteries of mid-range Wisla missiles, 11 short-range Narew missiles, 77 self-propelled Poprad units, and six Pilica rocket-artillery systems.
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