The Italian government allocated US$25.6 billion for the total defense budget, which recorded a CAGR of 0.35% during the review period (2008-2012). However, the defense budget, which was estimated to be US$28.1 billion in 2012, is expected to increase at a CAGR of 0.59% during the forecast period (2013-2017), to reach US$28.8 billion by 2017. Cumulatively, US$141.0 billion is expected to be allocated to the Italian MOD for defense during the forecast period.
The Italian common services expenditure includes research and development (R&D), planning, and administration services. During the review period, the common services budget was valued at US$5.4 billion in 2008 which increased to US$6 billion in 2012 at a CAGR of 2.80%. However, during the forecast period, this figure is expected to decrease at a CAGR of -8.99%, from US$7.7 billion in 2013 to US$5.3 billion in 2017. The gradual decline in expenditure on common services can be attributed to the gradual completion of a number of training and R&D programs that are to be executed over the forecast period. The Italian Army’s budget accounted for 33.2% of the overall defense function in 2012, followed by the Air force at 18.1%, and the Navy at 14.2%.
The Air force is expected to grow at the fastest rate during forecast period with expenditure in 2013 valued at US$3.3 billion, which is anticipated to grow at an estimated CAGR of 7.30% to reach US$4.4 billion in 2017. This high rate of growth is expected to be fuelled by the continuing procurement of Fighter planes and Multi Role Aircraft over the forecast period.
Source: ASDReports - Market Research
Date: Mar 7, 2013