• South Korea’s defense expenditure is anticipated to register 5.58% CAGR over 2022-2026
• Continues to perceive Chinese military expansion with distrust and wary of Japan’s remilitarization plans
• Plans to eventually equip own aircraft with F-35B Lightning II aircraft and deploy them in a light carrier role

With the collapse of the peace process with North Korea in 2020, South Korea has been compelled to bolster its defense expenditure. Other factors such as the need to counter Japan’s plan to equip Izumo helicopter destroyers with F-35B Lightning II aircraft as well as increasing Chinese incursions will drive South Korea’s defense spending, according to GlobalData, a leading data and analytics company.

GlobalData’s report, ‘South Korea Defense Market – Attractiveness, Competitive Landscape and Forecasts to 2026’, reveals that South Korean defense expenditure is set to experience a robust compound annual growth rate (CAGR) of 5.58% from US$48.7bn in 2022 to US$60.5bn in 2026

Defense acquisition and R&D spending will also see a robust growth from US$15.8bn in 2022 to US$19.7bn in 2026, owing to the need to develop domestic industry and procure the latest technologies to counter an increasingly hostile neighboring state over the forecast period 2022-2026.

Abhijit Apsingikar, Aerospace & Defense Analyst at GlobalData, comments: “While the peace process with North Korea compelled South Korea to adopt a more accommodative stance, where it even scaled back on the scope of military exercises with the US, North Korea continued to perceive the South Korean acquisition of F-35A Lightning II aircraft as a major security threat. With the North Korean foreign minister Ri Son-gwon stating that the prospects of peace between South Korea, the US and the North Korean state had ‘faded away into a dark nightmare’ the prospects of lasting peace in the Korean peninsula have dwindled drastically.”

South Korea continues to perceive Chinese military expansion with distrust and is wary of Japan’s remilitarization plans. South Korea’s anxiety is aggravated by the increasing incidences of Chinese incursions within South Korean territorial waters coupled with Japan’s plan to convert its Izumo class helicopter destroyers by equipping them with a fighter wing of F-35B Lightning II aircraft.

Mr Apsingikar explains: “All these factors have prompted South Korea to initiate design and development of its own aircraft carrier as a part of the CVX carrier (formerly LPX-II) program. South Korea plans to eventually equip them with F-35B Lightning II aircraft and deploy them in a light carrier role.”

North Korea’s readoption of a relatively hostile stance with South Korea precludes any possibility of lasting peace with South Korea. The South Korean 2020 defense whitepaper takes note of North Korea’s expanded arsenal of ballistic missiles along with continued induction of relatively modern equipment and exercising tactics for attacking strategic targets in South Korea, including the Presidential Office.

Mr Apsingikar concludes: “As North Korea continues to strengthen its military capabilities by expanding its arsenal of nuclear weapons, ballistic missiles and other Weapons of Mass Destruction (WMD), South Korea along with the US has formulated bespoke deterrence strategies in order to counter the threat.”