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Turkey exceeds defence export target as industrial capabilities continue to grow

29 April 2019 Jane's Editorial Staff

The latest analysis from Jane's Defence Budgets, highlights that Turkish defence exports have exceeded their USD2 billion target, with sustained success in export markets aided by enhanced investment in defence research and development.

"Turkey exceeded its 2018 USD2 billion target in aerospace and defence exports, with continued development of markets in the Gulf, Asia and Africa furthering this upwards trend", said Charles Forrester, senior defence industry analyst at Jane's by IHS Markit.

"As the country develops new technologies - ranging from rail guns and missiles to electronic warfare systems - its overall competitiveness will increase on the global market. The ongoing improvement in other core technology programmes, such as armoured vehicles and remote weapons stations, will also serve to maintain pace in global markets for lower cost, high technology solutions."

Turkey's core defence budget more than doubles since 2015

Turkey's core defence budget has doubled in nominal terms since 2015 to reach TRY46.5 billion (USD8.1 billion) in 2019, although Jane's notes that the addition of extra-budgetary items brings total related spending in 2019 closer to TRY64.5 billion (USD11.2 billion). However, in real terms, the defence budget has increased by one fifth since 2015 as increases were tempered by high rates of inflation.

"Persistently high levels of inflation combined with a significantly weaker lira present significant challenges to the Turkish defence budget," said Fenella McGerty, principal analyst at Jane's. "Inflation (CPI) is projected to reach 18% in 2019, while the lira has halved in value against the dollar since 2015.

Turkey invests 5% of annual defence spending to research and development which is one of the highest proportions globally and has served to bolster domestic capabilities. The focus on self-sufficiency has mitigated some of the fallout from a weaker lira as the country relies less on imported material."

What's next for Turkish industrial capabilities?

"Collaborative projects derived through the country's highly successful offset programme will also build-out Turkish industrial capabilities in the future", Forrester said. "The initiation of domestic programmes, such as the TF-X fighter aircraft, will help to advance domestic technical capabilities to give a degree of parity with other Western states."

The country is continuing to work on improving its self-sustaining capabilities by increasing the indigenous content of equipment operated by its armed forces, with the government claiming to have reached a local content level of 65% in 2018.

As major programmes, such as the Altay main battle tank, take shape and enter into the manufacturing stage, Turkey's self-sustaining capabilities are expected to increase as the value of domestic products rises over time.

Jane's Defence Budgets from IHS Markit applies a unique methodology to deliver a macro-level analysis of national defence spending around the world. Covering 105 countries accounting for 99% of global defence spend, it provides a 20-year view with 10 years of historical analysis alongside 10 years of forecast, to deliver critical insight into the current and future size, shape, and capabilities of the world's key military powers. Find out more.

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