Equipment/R&D spending is estimated somewhat differently
Equipment/R&D spending is estimated somewhat differently in the German
defence budget, which foresees an increase of EUR 591 m (or 11% yoy) in total
equipment/R&D spending this year to EUR 6 bn (or 16.2% of total). The bulk of
additional spending (EUR 404 m) thereby goes to R&D, increasing its share of
total spending to 3.1% compared to 2.1% in the previous year.
In a scenario, where Germany aims to meet both the 2% of GDP spending target (as
discussed above) and the 20% equipment target by 2024, this would translate
into substantial additional spending on procurement and R&D. Spending on new
equipment, research and development would have to rise by 170% to EUR 16
bn in 2024, according to our estimations (see scenario 1 in chart 12).
This would translate into total cumulative equipment spending of around EUR 77 bn
between 2018 and 2024. It compares to only EUR 48 bn in scenario 4, where
defence spending remains at 1.2% of GDP, equipment/R&D at 16% of total.
EU Forecast
euf:ba18.d:82/nws-01