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REGIONAL AIRCRAFT MARKET STABILIZING; LONG-TERM GROWTH PROJECTED
Sep 23, 2016
FORECAST INTERNATIONAL: INSATIABLE DEMAND FOR DATA AND CONNECTIVITY DRIVE COMMERCIAL SATELLITE MARKET
Sep 12, 2016
GLOBAL DEFENSE MARKET ON UPSWING AS ASIA SPEARHEADS GROWTH
Sep 08, 2016
FROM CIVIL DISOBEDIENCE TO TOTAL WAR – THE FLOW OF INFORMATION REMAINS PROFITABLE
Sep 01, 2016
FORECAST INTERNATIONAL: 15-YEAR WORLD AVIATION GAS TURBINE MARKET WORTH A STAGGERING $1.2 TRILLION
Aug 22, 2016
FORECAST INTERNATIONAL PROJECTS NAVAL RADAR MARKET WORTH MORE THAN $13 BILLION OVER 10 YEARS
Jul 18, 2016
SMALLSATS PLAY GROWING ROLE IN $29 BILLION REMOTE SENSING SATELLITE MARKET
Jul 13, 2016
FORECAST INTERNATIONAL: F-35 LIGHTNING II TO DOMINATE FIGHTER MARKET
Jul 12, 2016
FORECAST INTERNATIONAL PROJECTS $2.74 TRILLION LARGE JETLINER MARKET OVER NEXT 10 YEARS
Jul 11, 2016
FORECAST INTERNATIONAL EXPECTS AIRBUS AND BOEING BACKLOGS WILL DECLINE IN 2016
Jun 16, 2016
U.S. NAVY'S NEXT-GEN JAMMER TO LEAD 10-YEAR, $5 BILLION ELECTRONIC ATTACK MARKET
Jun 06, 2016
ELECTRONICS CONTINUE TO DOMINATE THE LANDSCAPE, WHILE SLEP LOOMS AS A PRIORITY FOR THE FIGHTER/ATTACK/TRAINER R&M MARKET
May 09, 2016
FORECAST INTERNATIONAL SEES SYRIAN CONFLICT DRIVING NEIGHBORS' SECURITY POSTURES
Mar 28, 2016
U.S. DEFENSE ELECTRONICS – SIGNS OF GROWTH AS BUDGETS REMAIN TIGHT
Mar 21, 2016
FORECAST INTERNATIONAL: CHANGES IN COMPETITIVE LANDSCAPE HIGHLIGHT MEDIUM/HEAVY MILITARY ROTORCRAFT MARKET
Feb 22, 2016
FORECAST INTERNATIONAL INTRODUCES DYNAMIC NEW SITE; SEES BRIGHT FUTURE FOR POWER & ENERGY MARKETS
Dec 08, 2015
BIZJET PROSPECTS BRIGHTEN AS U.S. CUSTOMERS RETURN TO THE MARKET
Nov 17, 2015
REGIONAL AIRCRAFT MARKET READY FOR TAKEOFF
Nov 09, 2015

Press Release

Contact: Rebecca Barrett
Phone: (203) 426-0800
Fax: (203) 426-4262
Web site: www.forecastinternational.com
E-mail: rebecca.barrett@forecast1.com
Forecast International, Inc.
22 Commerce Rd. Newtown, CT 06470 USA
 

FOR IMMEDIATE RELEASE

Three Key Factors at Play for Russia's $705 Billion Military Modernization

NEWTOWN, Conn. [April 11, 2011] — The Russian government is intent on reviving the nation's arms industry while simultaneously modernizing the armed forces. To this end, the Kremlin has revised its State Armaments Program (SAP) and is now calling for RUB20 trillion ($704.9 billion) to be spent on the military's modernization from 2011-2020. There are three key factors that will determine the extent to which the SAP can be implemented.

First, in order to meet the funding goal of RUB20 trillion, approximately 4.5 percent of the nation's GDP must be directed toward military funding. However, given Russia's current financial position, this may be a bit ambitious.

According to Rebecca Barrett, Eurasian defense analyst at Forecast International, the recent global economic crisis "exposed the structural faults of the Russian economy.” She noted, "While equity markets have improved since mid-2009 and capital markets have re-opened, the repair of the financial system is far from complete."

The government is now hoping that the economy will reach pre-crisis levels by the end of 2012, at which time GDP should be on par with the levels achieved in 2008.

At the same time, the crisis has also exposed the financial weaknesses of the Russian aerospace and defense industry. Fortunately for Moscow, the timing could not have been better. The Kremlin leveraged this exposure to consolidate the defense sector under government control and will now use the industry's capabilities to complete the military's modernization plan. However, Barrett points out in the "Market Overview" report on Russia that the government must invest in research and development programs for the defense sector in order to stave off the pending industrial decline. Without the investment, the industry's defense technology base could become a major impediment to the SAP.

The third key factor is the defense budget. The MoD has begun transitioning funding streams to support additional arms procurements through two major reform processes. The first is a cost-saving reform which calls for the reduction of some 200,000 personnel by 2012. The second major reform is the adoption of a new budgetary framework. According to Barrett, "The process is designed to modernize the Kremlin's fiscal practices and provide longer-term price and policy signals to the Russian defense industry."

In order for the SAP to be fully implemented, the government must continue to invest heavily in both the military and the nation's defense industry. Furthermore, because the SAP calls for 11 percent of existing military equipment to be upgraded and a full 70 percent to be replaced with modern weapons, the Russian defense industry needs to stay afloat and the economy must continue to rebound at a steady rate.

Forecast International, Inc. (www.forecastinternational.com) is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. To arrange an interview with Forecast International’s editors, please contact Ray Peterson, Vice President, Research & Editorial Services (203) 426-0800, ray.peterson@forecast1.com. Proprietary Special Research is also available. Contact Jonathan Watson, Managing Director, The Forecast Consulting Group (j.watson@forecast1.com). Questions regarding sales may be directed to sales@forecast1.com.



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