Taiwan’s Defense Budget Surpasses 3% of GDP for the First Time Since 2009
Government Approves 22.9% Increase Amid Rising Tensions with China and U.S. Demands
The Taiwanese government has decided to allocate 949.5 billion New Taiwan dollars (approximately 43.5 trillion won) for next year's defense budget, an increase of 22.9% compared to this year, amid military pressure from China and demands from the United States for increased defense spending. This amount exceeds 3% of the country's gross domestic product (GDP) for the first time since 2009.
According to the Central News Agency (CNA) and other sources on the 21st, the Executive Yuan of Taiwan held a meeting that day and finalized the central government’s total budget for next year, which includes a defense budget of 949.5 billion New Taiwan dollars. This figure represents 3.32% of Taiwan’s GDP.
Previously, Taiwan President Lai Chingte, who is known for his pro-U.S. and pro-independence stance, had emphasized that the defense budget should exceed 3% of GDP. The move appears to partially accommodate demands from U.S. President Donald Trump, who, during his presidential campaign, insisted that Taiwan should pay protection fees to the United States and increase its defense spending to as much as 10% of GDP. This comes as cross-strait tensions remain high due to continued military pressure from China.
Premier Cho Jungtai stated at a press conference that the budget plan for next year is "a concrete demonstration to the world and to the people of Taiwan of our determination and capability to safeguard national sovereignty and security, as well as stability and security in the Indo-Pacific region."
Next year’s defense budget includes 561.4 billion New Taiwan dollars (about 25.73 trillion won) for defense expenditures, 179.2 billion New Taiwan dollars (about 8.21 trillion won) in special budgets, 65.4 billion New Taiwan dollars (about 3 trillion won) for non-operational special funds, 106.4 billion New Taiwan dollars (about 4.87 trillion won) for veterans’ pensions, and 37.1 billion New Taiwan dollars (about 1.7 trillion won) for Coast Guard expenses.
Premier Cho explained that the inclusion of Coast Guard and veterans’ support budgets in the defense budget was based on NATO standards.
The total revenues and expenditures of next year's central government budget are 2.8623 trillion New Taiwan dollars (about 131.3 trillion won) and 3.035 trillion New Taiwan dollars (about 139.2 trillion won), respectively.
The finalized budget plan will be submitted to the Legislative Yuan (parliament) around September. Currently, no party holds a majority in the Legislative Yuan, with the opposition Kuomintang holding a slight lead as the largest party. Bloomberg reports that there is a high possibility the budget may change during the legislative review process.
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