Taiwan's defense spending to reach NT$647 billion, 2.45% of GDP in 2025

Taipei, Aug. 22 (CNA) Taiwan will spend NT$647 billion (US$20.24 billion) on defense next year, representing 2.45 percent of the county's gross domestic product (GDP), according to a central government budget proposal approved by the Cabinet on Thursday.

The proposed NT$647 billion budget for fiscal 2025, which includes special budgets and funds available for the Ministry of National Defense (MND), will account for 2.45 percent of Taiwan's GDP, a decrease of 0.05 percentage points from the current year.

Taiwan's defense budgets in 2023 and 2024 were NT$580.3 billion and NT$606.8 billion, respectively. Both comprised around 2.5 percent of the country's GDP.

At a press briefing on Thursday, Hsieh Chi-hsien (謝其賢), head of the MND's Comptroller Bureau, denied the government was cutting its defense budget for next year, saying that expenditure had seen "steady increases" in recent years.

Hsieh said while raising the annual defense budget to 3 percent of Taiwan's GDP -- a target repeatedly suggested by American officials and experts -- remained "a goal," the MND would draw up allocation plans according to the country's "defense needs" and "financial situation."

He added that the MND respected comments from all quarters on the appropriate level of defense spending, but had no intention to "engage in an arms race with other countries."

The budgeted NT$647 billion of the total NT$3.33 trillion government budget in 2025 put forth by the Cabinet's Directorate-General of Budget, Accounting and Statistics (DGBAS) represents a year-on-year increase of NT$46.4 billion, or 7.7 percent.

The budget proposal will be sent to the Legislature at the end of August for approval, the Cabinet said.

According to the proposal, the MND will spend NT$181.5 billion on personnel costs and NT$148.7 billion on procuring components for military equipment, ammunition, and equipment maintenance, Hsieh said.

In the meantime, spending on military investment will increase by NT$20.3 billion, reaching NT$145.8 billion in 2025 due to payments for arms purchased from the United States, he added.

Under the plan, the MND is also expected to allocate NT$90.4 billion as a special budget to purchase military aircraft and other equipment to upgrade its sea and air defense capabilities.

However, Hsieh declined to disclose whether the proposed 2025 defense spending would to any extent cover MND plans to build more domestic submarines in the next few years, saying only that relevant "plans were still being reviewed by the Cabinet."

The MND has reportedly planned to build up to seven new submarines following the successful ceremonial launch of the prototype "Narwhal," or "Hai Kun" (海鯤號) in Chinese, in September 2023.