Following the words of Taiwanese President Lai Ching-te, the defense budget for 2025 will be boosted to a new record of USD 19.74 billion. This amount represents a 6% year-on-year increase. “We are determined to enhance self-defense and deepen cooperation with democratic partners,” Lai stated in a press release from the Presidential Office.
The press release did not provide a direct comparison with the current year’s defense budget. However, it is known that the Taiwanese government had proposed a total defense expenditure of NT$606.8 billion for 2024, reflecting the growing security concerns amid China’s increasingly aggressive stance.
On the other hand, the proposal will account for about 20% of the executive’s total spending for the next year, estimated at USD 95.8 billion. In terms of GDP percentage, the new defense budget will represent around 2.32% of Taiwan’s GDP in 2025.
A record budget in response to Chinese aggression
In 2023, the Taiwanese government had already factored in the regional context with China and its escalation to introduce new procurement projects. At that time, there was talk of incorporating privately developed and commercial unmanned aerial systems into its armed forces. The plan included an expenditure of USD 175.57 million to acquire approximately 3,221 systems.
Similarly, the 2024 budget proposed in 2023 included USD 75 million for the purchase of 96 ground surveillance drones for the Navy and USD 40 million for 1,485 microdrones. Of these two models, a ground surveillance UAV and a microdrone, have already passed the necessary tests, according to the report.
Additionally, the situation in the Indo-Pacific region is a major consideration for Taiwan. This is not only due to the increasing hostility from China and its military exercises around the island but also due to various analyses pointing to a potential future conflict. These analyses suggest that this region might be the next to experience a major conflict.
Finally, the self-sufficiency mentioned by the Taiwanese president is another area of development within the armed forces. A prime example is the recently unveiled locally manufactured attack submarine, the Narwhal.
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