Despite the Greek government’s policy goals of reaching NATO’s 2% spending target, the country’s economic issues and political divisions are a challenge to its long-term defense spending increases and acquisition programs. As such, Greece’s defense budget is projected to remain in the mid-1% of its gross domestic product (GDP) through 2029, says GlobalData, a leading data and analytics company*.

GlobalData’s latest report, “Greece Defense Market 2024-2029”, reveals that Greece’s defense budget is set to reach $9.8 billion in 2029, up from $5.5 billion in 2020. The acquisition budget, which was $0.59 billion in 2020, will rise significantly to $5.22 billion by 2029, accounting for the majority of the budget growth. The personnel spend, which is estimated at $4.07 billion in 2024, will decline slightly to $4.05 billion by the end of the forecast period in 2029.

Wilson Jones, Defense Analyst at GlobalData, comments: “The largest section of Greece’s budget has historically been personnel, remaining just over $4.0 billion for all historic and forecast years. This is due to Greece’s large military forces of over 200,000 uniformed members and extensive conscription system, impressive for a country with a population of around 10 million. As the number of troops is not expected to grow in the forecast, the personnel spend will remain almost stable.”

Greece’s largest area of growth is its spending on acquisition, reflecting how much the government is focusing on platform modernization for its air, ground, and maritime fleets. The government’s efforts to produce many platforms domestically, either entirely or through offset agreements, means that much of spending will benefit the Greek defense industrial base and help maintain a skilled workforce for the future.

In 2020, the Greek prime minister announced that greater focus would be placed on the country's defense expenditure. In light of heightening tensions with Turkey, the country's decision to increase its investment in defense comprises a number of elements that seek to augment and modernize its fleet of air, maritime, and ground systems.

Some notable programs include the acquisition of 18 Rafale fighter aircraft from France in order to replace its Mirage 2000, which was later extended to 24 units; and the procurement of four multi-purpose frigates and the upgrade of four currently serving MEKO frigates.

Jones adds: “The Rafale fighter aircraft acquisition will be done in parallel with the modernization of Greece's F-16 aircraft, a move that will increase the country's aerial defense and power.”

The strengthening of Greece's naval frontiers will additionally be supplemented with the procurement of four naval MH-60R rotorcrafts (with an option to purchase a total of seven). Greater investment in the land forces will see the procurement of a large number of anti-tank weapons, guided missiles and heavy-type torpedoes. Additionally, unmanned aerial vehicles (UAVs) have been ordered to act in observation and attack roles, acting as force multipliers.

Jones concludes: “As a result of increased defense commitments in recent years and a growth in the overall GDP against stable population numbers, Greece’s per capita spending has increased steeply, rising $514.7 in 2020, to $860.8 by 2024. A projected increase in per capita spending to $976.2 in 2029 will allow for increased acquisitions as well as further spending on other elements of the Greek defense budget.”

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

*Information based on GlobalData’s latest report, “Greece Defense Market 2024-2029”,  which identifies new and developing trends in Greece’s defense markets and modernization programs