North Macedonia is set to significantly increase its defense spending from $317 million in 2022 to $542 million by 2027, according to GlobalData. The leading data and analytics company notes that one of the reasons for such a rise is to fund acquisitions that enable modernization—as the country is still operating mostly aging Soviet-era equipment. Furthermore, the country has donated various equipment to Ukraine, including tanks, that will need to be replaced.

GlobalData’s latest report, ‘North Macedonia Defense Market 2022-2027’, notes that, while North Macedonia’s current spend of $317 million is low compared to other NATO nations, the country is spending a high percentage of its GDP on defense (2.6%)—higher than some countries with greater economies such as France and Germany, who spend a respective 1.9% and 1.8.

William Davies, Associate Analyst at GlobalData, comments: “The increased spending by North Macedonia is still low in real terms, however, it is admirable in terms of its GDP spend compared to NATO allies. North Macedonia has made equipment purchase commitments, including armored vehicles, and the country is increasing acquisition spending across sectors such as electronic warfare.”

GlobalData’s report highlights that the conflict in Ukraine will make spare parts for North Macedonia’s largely Soviet-era military equipment harder to come by —compounding the need for an increase in defense spend.

Davies adds “Despite the fact that North Macedonia has increased defense spending in recent years, and is forecast to continue doing so, it has a number of domestic problems that will act as barriers for companies seeking to enter the market. This includes issues with corruptions and mismanagement, as well as the fact that the budget has significant limitations.”