Ireland is Expected to Invest US$6.1Bn in its Armed Forces

Wednesday 5 December 2012, Amsterdam

Irish defense expenditure, estimated at US$1.23 bn in 2012, registered a CAGR of -5.47% during the review period (2008-2012) and is expected to continue to decline, at a CAGR of -0.34%, during the forecast period (2013-2017), to reach an estimated US$1.21 bn in 2017. Defense expenditure as a percentage of GDP is expected to reduce from 0.59% in 2012 to 0.48% in 2017. Overall, the country is expected to spend an estimated US$6.1 bn on its armed forces during the forecast period, of which approximately US$0.66 bn will be allocated for capital expenditure (see graph).

In 2012 Ireland has a defense budget of US$1.3 bn and invests just 0.6% of its GDP in defense. This is small in comparison with the UK and France, which spend 2.3% and 2.1% of their GDP on defense respectively. In addition, Ireland’s defense budget is expected to decline further in the forecast period, and in the Irish defense industry, with small companies with little specialization in weapon categories, foreign weapon suppliers face infrastructure challenges in entering the market.

Ireland is a member of the EDA, which was formed to improve European defense capabilities and to create a single defense equipment market; consequently, the Irish government gives preference to European countries for the import of defense equipment.  The EU issued a directive in 2009 that simplified the terms and conditions of transfers of defense products within the EU and coordinated procedures for the award of defense contracts, which acts as a barrier for non–EU companies trying to enter into the Irish defense market.