Eastern Europe Defense Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Eastern Europe Defense Market is segmented by Type (Personnel Training and Protection, Communication Systems, Weapons and Ammunition, and Vehicles), and Geography. The report offers market size and forecasts for the Eastern Europe Defense Market in value (in USD billion) for all the above segments.

Eastern Europe Defense Market Size

Eastern Europe Defense Market - overview
Study Period: 2018 - 2028
CAGR: > 4 %

Major Players


*Disclaimer: Major Players sorted in no particular order


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Eastern Europe Defense Market Analysis

The Eastern European defense market is poised to record a CAGR of more than 4% during the forecast period (2022 - 2027).

Though most of the countries in Eastern Europe experienced severe economic downturns in 2020 and 2021 due to the Covid-19 pandemic, the military expenditure of the region continued to increase, driven by the regional conflicts and the push for modernization. According to SIPRI, the defense spending of the countries in the region totaled USD 76.3 billion in 2021, an increase of 2.3% as compared to that of 2020 and 15% higher than that of 2012.

Furthermore, the Russian invasion of Ukraine, the largest armed conflict in the region since the Second World War, is expected to propel the defense spending of the region in the years to come. Countries in the region are going through many military modernization plans, and they are planning to upgrade their armed, naval, and air forces. Such factors may drive the market in the coming years. The growing perceptions of the threat from Russia and calls from the United States to the NATO countries to increase their defense spending will be the growth drivers for the market.

Eastern Europe Defense Industry Segmentation

Bulgaria, Hungary, the Czech Republic, Ukraine, Moldova, Belarus, Russia, Slovakia, Romania, and Poland are the countries considered in Eastern Europe as per the UN Statistics Division. The report includes revenues from both procurement and aftermarket services. The weapons and ammunition segment includes artillery and mortar systems, infantry weapons, missiles, and missile defense systems, as well as small, medium, and large-caliber ammunition.

The report is segmented by type into Personnel Training and Protection, Communication Systems, Weapons and Ammunition, and Vehicles. The report also analyses the market in major countries across the region. The report offers market sizes and forecasts and are represented by value (USD billion).

Personnel Training and Protection
Communication Systems
Weapons and Ammunition
Rest of Eastern Europe

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Eastern Europe Defense Market Trends

This section covers the major market trends shaping the Eastern Europe Defense Market according to our research experts:

Vehicles Segment Accounted for a Major Market Share in 2021

In 2021, the vehicles segment dominated the market, owing to the various ongoing upgrade and procurement programs in the region. Currently, most of the investments are being directed toward fleet expansion initiatives. Additionally, fleet modernization plans are underway for many countries, as most of the fleet in the region belonged to the Soviet era. Many countries in the region are members of NATO and have vowed to increase their military spending to 2% of the GDP. Countries, like Poland and Russia, are focusing on increasing the fleet of naval vessels, thereby propelling the growth of the segment. For instance, in August 2021, the Spanish state-owned shipbuilding company Navantia announced that it has been shortlisted to build three frigates in a Technology Transfer (ToT) program for the Polish Navy. On the other hand, the Russian Navy received three new nuclear-powered submarines in 2021. In addition, as of January 2022, 13 nuclear-powered submarines are at different stages of construction in the Russian shipyards and are all expected to be delivered to the navy before 2027. The Russian Navy also plans to build and procure a total of 40 Project 12700 mine countermeasure vessels by 2035. In addition to the naval capabilities, countries are also developing their aerial and terrestrial capabilities for surveillance and combat missions. In April 2022, Hungary announced that it has ordered 12 modern Aero Vodochody L-39NG trainer aircraft. The first aircraft will be delivered in 2024. Such procurements are anticipated to propel the growth of the vehicles segment of the market during the forecast period.

eastern europe defense market segment

Poland to Show Significant Growth During the Forecast Period

During the forecast period, Poland is expected to show significant growth compared to other countries in the region. Poland's military is continuously undergoing changes, aimed at transforming it into a more capable, modern, and NATO-compatible force. Poland’s military spending was USD 13.7 billion in 2021. Poland’s spending was 58% higher than in 2012. In October 2021, Poland announced amendments to the country’s budget, as the country experienced a better than expected economic situation. The defense expenditure increased by PLN 6.3 billion, or approx. USD 1.6 billion (12.2%) to reach about USD 15 billion. The extra funds would be allocated mainly to modernization efforts pursued by the military. Poland is already spending 2% of GDP on defense and has been planning further increases. In March 2022, the country announced plans to increase the defense spending from the NATO-recommended 2% to 3% in 2023, driven by the Russia-Ukraine war and the perceived Russian threat. The increase in the spending levels will enable the country to increase the size of its armed forces, restore the reserve system, and modernize its equipment. The government is making changes in every area of operation, including training, protection, communications, and weapon systems, and across all types of vehicles. The main elements of the Polish army’s modernization plans include the improvement of troop capacity and air defense systems and the development of weaponry and manned and unmanned vehicle strength. In April 2022, Poland signed a deal with MBDA under which the country’s military will get a short-range, air-defense system using MBDA’s Common Anti-air Modular Missile, or CAMM. Such procurement activities for land, air, and sea platforms will propel the growth of the market in the country during the forecast period.

eastern europe defense market geography

Eastern Europe Defense Industry Overview

Rostec, BAE Systems PLC, Thales Group, United Shipbuilding Corporation, and Rheinmetall AG are some of the major players in the market. Mergers and acquisitions are increasing in the market as players aim to increase productivity and cut costs. For instance, in March 2021, the Russian state corporation Rostec announced that the United Aircraft Corporation (UAC), and the fighter manufacturers Sukhoi and Mikoyan-Gurevich, will be merged into a single aircraft building center. The optimization is expected to enhance productivity and save about USD 1.7 billion for the company. Local manufacturers are strengthening their presence in the region by increasing their production capabilities and forming joint ventures with foreign players, thereby increasing their competitiveness in the market. Furthermore, players can make use of the rising opportunities from countries, like Poland, Romania, and Bulgaria, as these countries are planning for further upgrades of military equipment in the coming years.

Eastern Europe Defense Market Leaders

  1. Rostec

  2. BAE Systems PLC

  3. Thales Group

  4. Rheinmetall AG

  5. United Shipbuilding Corporation

*Disclaimer: Major Players sorted in no particular order

Eastern Europe Defense Market Cl.png

Eastern Europe Defense Market News

In September 2021, Saab announced that it will provide innovative, flexible combat training solutions and services to the Polish military under a five-year deal worth about USD 116 million. The solution includes capabilities such as Saab’s latest exercise control (EXCON) and communication systems, as well as the latest generation of hi-fidelity simulators for soldiers, weapons, and vehicles. A three-year support period within the contract covers deployable, integrated logistics, and operational support to the Polish Armed Forces.

In May 2021, Rheinmetall Protection Systems announced that it has been contracted to equip Hungary’s new Lynx infantry fighting vehicles (IFVs) with StrikeShield hard-kill active protection system (APS) under a contract worth more than USD 170 million. The order will involve the installation of the APS on 209 Hungarian Lynx IFVs.

Eastern Europe Defense Market Report - Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 PESTLE Analysis

  5. 5. MARKET SEGMENTATION (Market Size by Value - USD billion, 2022 - 2027)

    1. 5.1 Type

      1. 5.1.1 Personnel Training and Protection

      2. 5.1.2 Communication Systems

      3. 5.1.3 Weapons and Ammunition

      4. 5.1.4 Vehicles

    2. 5.2 Country

      1. 5.2.1 Poland

      2. 5.2.2 Russia

      3. 5.2.3 Hungary

      4. 5.2.4 Romania

      5. 5.2.5 Rest of Eastern Europe


    1. 6.1 Company Profiles

      1. 6.1.1 Rostec

      2. 6.1.2 MESKO

      3. 6.1.3 United Shipbuilding Corporation

      4. 6.1.4 Rheinmetall AG

      5. 6.1.5 BAE Systems PLC

      6. 6.1.6 Thales Group

      7. 6.1.7 Raytheon Technologies Corporation

      8. 6.1.8 Airbus SE

      9. 6.1.9 Lockheed Martin Corporation

      10. 6.1.10 Northrop Grumman Corporation

      11. 6.1.11 General Dynamics Corporation


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Eastern Europe Defense Market Research FAQs

The Eastern Europe Defense Market is studied from 2018 - 2028.

The Eastern Europe Defense Market is growing at a CAGR of >4% over the next 5 years.

Rostec, BAE Systems PLC, Thales Group, Rheinmetall AG, United Shipbuilding Corporation are the major companies operating in Eastern Europe Defense Market.

Eastern Europe Defense Industry Report

Statistics for the 2023 Eastern Europe Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Eastern Europe Defense analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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