Analysis by leading intelligence consultancy GlobalData shows that Bangladesh’s defense spending as a percentage of its gross domestic product is expected to decline marginally between 2024 and 2028.
While the average rate during 2019 to 2023 was 1.8%, this is expected to drop to 1.5% between 2024 and 2028, according to the company’s report: Bangladesh Defense Market 2023-2028.
However, this is not due to a lack of funding, as the defense budget will grow from $4.3 billion in 2024 to $5.3 billion in 2028, at a compound annual growth rate of 5.2 percent.
So what accounts for this small deficit over the next five years?
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Although the South Asian nation is expected to provide strong funding, it is unlikely to be at the expense of economic growth. Bangladesh is on an economic recovery path from the recession caused by the pandemic. Consequently, as the economy improves, a consistent flow of defense funding is expected.
Bangladesh is focusing on its naval buildup
The defense budget will increase to accommodate the modernization of the armed forces, a goal set in 2009 with the introduction of the country’s “Force Goal 2030”, aimed at strengthening their capabilities.
Of the sectors, naval ships and surface combatants are set to dominate the budget, while communications and electronic warfare (EW) systems offer particularly lucrative opportunities, with their estimated contract allocation (ECAs) estimated at 1.7 billion dollars, $654.7 million and $450.1 m, respectively.
$1.4 billion is expected to be spent on frigates, cumulatively, while they will invest $181.6 million in light combat vessels during 2023–2028.
Similarly, in 2019, a contract was signed for domestically built guided missile frigates. Chittagong Dry Dock Limited has been awarded a contract to build six new offshore patrol vessels for the Bangladesh Navy.
The visit of the UK Royal Navy’s offshore patrol vessel, HMS Tamarin the Bay of Bengal in January 2023 demonstrates the concern of the Bangladesh Navy in its waters.
A series of discussions, joint training and cultural exchanges took place with a focus on underlining the UK’s commitment to Bangladesh.
“The Bangladesh Navy has been very willing to share knowledge and understand how we operate offshore patrol vessels,” Commander Elliott-Smith noted at the time.
“The visit made clear the strategic importance of Bangladesh. Its Navy approaches interaction with the UK with great reverence and unanimously celebrates that their doctrine and policies are aligned with ours.’
Read the original at Defence247.gr