TAIPEI (Taiwan News) — Taiwan's defense spending will reach a new high of NT$647 billion (US$20.25 billion) next year, the Cabinet revealed on Thursday (Aug. 22).
Taiwan's defense budget in 2025 will increase by 7.7% year-on-year, accounting for 2.45% of gross domestic product (GDP), per CNA. This year's defense spending accounts for 2.38% of GDP.
The spending includes NT$90.4 billion to procure new fighter jets and for missile production, part of the military's NT$240 billion special budget released in 2021 over five years.
Due to China’s ramped-up military and political pressure on Taiwan, President Lai Ching-te (賴清德) has pledged to boost defense spending and to modernize the military. The defense ministry’s chief audit executive, Hsieh Chi-hsien (謝其賢), said Taiwan's defense budget is “growing steadily,” and is expected to reach its 3% of GDP goal.
Hsieh said that money for submarines and drones will also be included in the 2025 defense budget. The plan is under review and will be sent to the Legislative Yuan in late August.
However, Hsieh said, "We will not engage in an arms race with other countries. We will increase spending according to our demands.” Future spending will also depend on whether Taiwan can acquire key weapons and equipment, he added.
Earlier this year, China said it would boost its defense spending by 7.2% to 1.67 trillion yuan (US$234.10 billion). Chinese defense spending accounts for 1.3% of its total GDP, analysts said.