Published on : Apr 14, 2016
ALBANY, New York, April 14, 2016: According to this report, the Jordanian defense industry witnessed a sluggish growth during the period from 2011 to 2015. At a CAGR of 0.27% during the review period, the expenditure on the defense sector in the country marginally rose from US$1.70 bn to a total of US$1.71 bn by the end of 2015.
The struggling economy, high rate of unemployment, dearth of natural resources, and the burden of a large pool of refugees have impacted negatively on the Jordan defense industry. However, the country’s recent attempts to upgrade its ammunitions are likely to increase its expenditure on military at a CAGR of 2.05% between 2016 and 2020 and account for US$1.9 bn during this period. The animosity among the neighboring nations and foreign military aid are also expected add significantly to the defense expenditure of Jordan, notes the research study.
Further, the market report states that Jordan’s security budget for the homeland is projected to rise at a CAGR of 5.98% over the forecast period, accounting for a cumulative value of US$8.8 bn. Illegal activities in refugee camps and internal conflicts in residential areas are expected to increase the expenditure on the homeland security. Apart from these, the risk of terrorist attack is also projected to aid the increment of the homeland security expenditure.
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Analysts expect the country to maintain the budget allocation for capital expenditure at a CAGR of 3.30% during the forecast period and invest mainly in armored vehicles, border surveillance equipment. The revenue expenditure is likely to be given preference over the capital expenditure during the forecast period. The per capita expenditure on defense is also anticipated to register steady growth in the next few years.
As per the report, foreign import plays a major role in the Jordan defense industry. The U.S, Belgium, and the Netherlands are the leading suppliers of military equipment to this country and missiles and aircraft dominate the defense import. In terms of export, Jordan mainly exports armored vehicles and aircraft. Kenya and Pakistan dominate the country’s overall defense export, which is likely to rise significantly over the forecast period.
The Jordan defense industry is likely to gain impetus from the increasing demand for border security systems and armored vehicles. However, small defense budget, together with rising corruption in the country, is anticipated to restrict the growth of this market over the forecast period, states the report.
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