Military modernisation to drive Malaysia defence budget at 8.4% CAGR over 2024-28

Driven by military modernisation programs to protect its sovereignty and address security threats such as piracy and terrorism, Malaysia’s defence budget is expected to experience a robust compound annual growth rate (CAGR) of 8.4% during 2024-28, reaching $6.2 billion in 2028, according to GlobalData, a data and analytics company. GlobalData’s latest report “Malaysia Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28,” reveals that Malaysia’s defence expenditure increased from $3.7 billion in 2022 to $4 billion in 2023, reflecting a significant annual growth rate of 10.3%. The increase in the defence budget is expected to fast-track military modernisation efforts, which may see the fruition and scale-up of many planned procurement programs. The budget will also support disaster response capabilities and international commitments while contributing to the country’s economic interests. The country’s pursuit of advanced platforms, including the acquisition of second-generation patrol vessels such as the littoral combat ships (SGPV-LCS) and littoral mission ships (LMS) built by Boustead Naval Shipyard (BNS), FA-50 light attack jets, and Tun Fatimah-class vessels highlights its dedication to bolster its defense capabilities. Rouble, Aerospace & Defense Analyst at GlobalData, comments: “Malaysia has been proactively addressing improvement areas in its air and naval capabilities by formulating plans to modernise its legacy military platforms in recent years. While military spending hasn’t traditionally held a top spot in the government’s priorities, resulting in delays and cancellations of military modernisation initiatives owing to economic constraints, there is a promising development in the 2023 defense budget. Malaysia’s integrated, agile, and focused approach highlighted in its defense budget is expected to enable it to build a technologically advanced armed force that can respond to modern and evolving threats.” Additionally, Malaysia’s defence market opens opportunities in sectors such as military fixed-wing aircraft, military unmanned aerial vehicles (UAVs), and missile and missile defence systems. The country is expected to consider acquiring more warships and ground-launched anti-ship cruise missiles to enhance its naval defence capabilities and bolster its maritime security efforts. Rouble concludes: “Malaysia’s Defense White Paper (DWP) underscores its commitment to create a “Force of the Future” capable of operating on dual fronts of peninsular and Borneo’s East Malaysia simultaneously, reflecting the country’s strategic ambitions in a complex security landscape in the Indo-Pacific. This vision likely involves a comprehensive approach with multi-domain operational capabilities, technological advancements, and a strong emphasis on training and skill development. By preparing its armed forces to effectively address modern security challenges in land, sea, air, and cyberspace, Malaysia aims to position itself as a resilient regional player, capable of responding to evolving threats while safeguarding its national interests and contributing to regional stability.” For Editorial Inquiries Contact: Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Director of Sales Graham Joss at [email protected]