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Defense budget of United States of America (2020 - 2028, USD billion)

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

The Defense budget of United States of America attained a value of USD 827.60 billion in 2023
The indicator recorded a historical growth (CAGR) of 5.40% between...
GlobalData projects the indicator to grow at a CAGR of...

Defense budget of United States of America (2020 - 2028, USD billion)

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US defense budget analysis

The US’s defense expenditure recorded a slow growth during 2017–21. Over 2022–26, it is forecast to register a single digit growth. Several factors have enabled the growth of military expenditure during the past five years, including the willingness of the current administration to boost the production of military equipment to secure the position of the US in the international order. The military-industrial complex, therefore, had an ally in the White House from a budget perspective, and the Biden administration will likely keep pushing for more defense spending, despite the economic slowdown generated by the COVID-19 pandemic. COVID-19’s impact and high inflation recorded in 2021 caused a downturn in the US economy, leading to a sudden decline in the defense budget in 2021.

The US DoD’s total budget includes acquisition (procurement and RDT&E), operation and maintenance (O&M) and other defense funds. The military budget is the largest portion of the discretionary US federal budget allocated to the DoD for any military-related expenditures.

Several factors enable the growth of military expenditure. First is the interest of the current administration regarding industrial production in general and the production of military equipment in particular, tied to its conviction that the preeminent position of the US in the international order ultimately relies on its military-industrial output.

The US has historically benchmarked its planned capability developments against the defense technology and combat capabilities of potential adversaries, such as Russia and China. Hence, the continuous development of advanced Anti-Access Area-Denial (A2AD) capabilities is centered on long range air defense systems

The US is a natural economic hub and military stronghold. It is packed with resources and has more economic channels, such as navigable waterways and ports, than the rest of the world combined. Its only neighbors are Canada and Mexico, which are not a major threat to the country’s security. Hence, there are no local challengers. This surplus of security provides the US strategic flexibility. It allows the country to project power abroad without needing to worry much about defending its territory. The reason the US is able to station military forces all around the globe and intrude in the politics of virtually every region is that it faces no serious threats in the Western Hemisphere.