Taiwan Cabinet approves NT$647 billion defense budget for 2025

Taiwan’s Cabinet approved a defense budget of NT$647 billion (US$20.24 billion) for the fiscal year 2025, representing 2.45 percent of the country’s GDP.

Taiwan’s Cabinet has approved a defense budget of NT$647 billion (US$20.24 billion) for the fiscal year 2025, which will represent 2.45 percent of the country’s gross domestic product (GDP). This proposed budget marks a slight decrease of 0.05 percentage points from the current year’s allocation, which is approximately 2.5 percent of GDP.

The new defense budget, which is part of a larger NT$3.33 trillion government budget proposal, shows a year-on-year increase of NT$46.4 billion, or 7.7 percent. The budget will cover various defense expenditures, including NT$181.5 billion for personnel costs, NT$148.7 billion for military equipment and ammunition, and NT$145.8 billion allocated for military investments. Notably, the investment in military assets includes NT$90.4 billion designated for purchasing military aircraft and upgrading sea and air defense systems.

Hsieh Chi-hsien, head of the Ministry of National Defense’s Comptroller Bureau, addressed concerns about the budget decrease by emphasizing that the reduction is not indicative of a cut in defense spending but rather a reflection of the government’s fiscal strategy. He highlighted that while Taiwan aims to eventually raise its defense spending to 3 percent of GDP—a target often suggested by American officials—the Ministry of National Defense (MND) will continue to allocate funds based on national defense needs and financial constraints.

The defense budget proposal is scheduled to be reviewed by Taiwan’s Legislature at the end of August. Although specific details about future submarine construction plans were not disclosed, the MND is reportedly considering building up to seven new submarines following the launch of the “Narwhal” (Hai Kun) prototype in September 2023.