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Defense budget of Germany (2020 - 2028, USD billion)

Industry: Aerospace, Defense and Space
Current: Macro-economic

The Defense budget of Germany attained a value of USD 70.52 billion in 2023
The indicator recorded a historical growth (CAGR) of 11% between...
GlobalData projects the indicator to grow at a CAGR of...

Defense budget of Germany (2020 - 2028, USD billion)

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Germany defense budget analysis

Germany’s defense budget was its highest in 2021, between 2018-2021, despite pressures from the ongoing COVID-19 pandemic. The economic pressures placed on the government by the coronavirus response can be seen in the growth rate of the budget over the forecast period, which suggests that the impact of the virus will be felt for years to come. Due to issues with the procurement agency for the armed forces, it is unlikely that the budget will increase due to a roadblock on spending placed on the budget by deep bureaucratic issues within the BAAINBw.

As one of the biggest economies within NATO, Germany’s contribution to the organization in terms of defense spending has the potential to be critical for the collective security of members. Therefore, as Germany fails to meet the spending target set by NATO, the nation has faced intense criticism and pressure from other members to up spending levels. Much of Germany’s fleet requires substantial modernization and updating due to years of low spending levels. As readiness levels are now so low and with platforms reaching the end of their life span, Germany is forced to modernize platforms across all domains.

A founding member of the EU, the union helps Germany fulfil one of its biggest political objectives; to maintain peaceful and fruitful collaboration with its neighbors. PESCO was formed in 2017 after many years of negotiation. It currently consists of the militaries of 25 EU member states, of which Germany is one. The aim of the organization is to eventually develop and deploy forces together, backed by pooled funds for research and development. The countries can then collaborate on planning, carrying out joint analyses of emerging crises and can then hopefully react to them quickly.