Sweden - Defense and Security: Expenditure driven by modernization (Strategy, Performance and Risk Analysis)
The aircraft category is a key growth driver of the Swedish defense and security industry, accounting for 52.8% of capital expenditure in 2016; followed by the C4ISR electronics and IT category with 13.9%. The country’s defense budget stood at US$6.6 billion in 2016, and will post a forecast-period CAGR of 2.2% to reach US$7.3 billion in 2021 due to tensions with Russia, the procurement of new defense systems, and Sweden's participation in international peacekeeping missions.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
Sweden’s revenue expenditure is to increase:
Revenue expenditure on defense and security in Sweden stood at US$3.5 billion in 2016, representing an increase of 2.2% from US$3.3 billion in 2015. It will post a forecast-period CAGR of 1.1% to reach US$3.7 billion in 2021. The increase in revenue expenditure is attributed to an increase in the cost of troop training, institutional education, construction, maintenance activities, salaries, allowances, pensions, transportation, food, insurance, welfare benefits, and miscellaneous expenditures for military personnel.
The country’s strained relationship with Russia is a reason of concern:
One of the more serious threats facing the country’s security is a growing concern over an increase in tensions with Russia. Sweden has stationed permanent troops on the Baltic Sea island of Gotland. Sweden, which is not a NATO member, is preparing itself for a future war and is currently in the process of upgrading its military with an increase in defense spending, after Russia increased military spending.
Sweden’s defense exports declined during 2012-2016:
Swedish exports include aircraft, ships, and missile defense systems. Sweden is a minor arms supplier in the world market. Europe receives the largest share of Sweden’s total arms exports followed by Asia, North America, and Africa respectively. Sweden’s total export declined at a CAGR of -21.8%, from US$206.0 million in 2012 to US$77.0 million in 2016, due to financial crises in partnered countries such as Italy.
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