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Defence expenditure – North Macedonia – 2024

Defence budget of North Macedonia has experienced a substantial increase since the country joined NATO in 2020. The increase is also a consequence of a long-term plan of modernisation of the Army. Despite the budget being underspent in the last two years, the 2024 budget comes with a 38% increase compared to the previous year. Defence expenditure as a share of GDP also increased from 1% in 2019 to over 2% planned in 2024.

2023

Share of GDP 1,67%
Share of total government
expenditure 4,52%

Budget laws for the upcoming year are regularly adopted by the Parliament of North Macedonia in late December. Balance sheets are usually adopted regularly as well. The Ministry of Defence publishes quartal budget realisation reports on its website.

Until 2021, the largest percentage of the budget was spent on personnel. Following modernisation projects and equipment procurement, such as Stryker and Oshkosh armed vehicles, the share of arms and equipment budget started to slowly increase. By the 2023 budget, North Macedonia planned to spend 39% on this category, however it actually spent 11% less, or 28% of defence expenditure. In 2024 arms and equipment spending is expected to surpass personnel expenditure.

The large portion of other expenses accounts for goods and services excluding capital expenditure, and transfers to pension fund and local municipalities. The defence budget of North Macedonia is divided into programmes and its transparency and disaggregation could be improved.

2024 – Balkan Defence Monitor 
Defence Expenditures – North Macedonia

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Defence expenditure – Montenegro – 2024

Defence budget of Montenegro has undergone fluctuations in the past years, both in terms of absolute increase and budget structure.

This is partly a consequence of the country joining NATO and modernizing the Army to meet the NATO standards, but also due to political crisis and changes of governments. Data for 2023 suggests a stabilization of defence expenditure compared to initial budget.

2023

Share of GDP 1,08%
Share of total government
expenditure 2,63%

Budgets for the upcoming year are usually adopted by the Parliament in November or December, albeit the 2021 Budget was adopted with a six-month delay. Balance sheets submitted by the Government have never been adopted by the Parliament, with the 2021 Balance sheet failing to pass the competent parliamentary Board and 2022 Balance sheet still being in procedure.

With the exception of 2018 and 2019, more than half of defence expenditure goes on personnel. Larger percentage of spending on arms and equipment in those two years is due to procurement of Bell helicopters and Oshkosh JLTV armoured vehicles. Except for 2023, expenditure structure greatly differs from initial budget structure – in 2022, 7.6 percent was planned for arms and equipment, but the balance sheet shows almost 24 percent of budget being spent. This gap was even larger in 2021. Upcoming procurements include 120mm vehicle-mounted mortar system from Israel worth 20 million USD. Montenegrin budget is among the most transparent in the region and has improved in 2023 by including NATO, EU and UN missions as specific budget activities. Transparency and disaggregation could be further improved, including by referring to specific procurements.

2024 – Balkan Defence Monitor 
Defence Expenditures – Montenegro

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Defence expenditure – Croatia – 2024

Military budget of Croatia has almost doubled since 2017, largely due to the procurement of 12 French Dassault Rafale fighter jets in 2021. Projections for 2024 and 2025 suggest steady further increase, partly attributed to procurements of Bradley armoured vehicles and Black Hawk helicopters from the USA. Defence expenditure as a percentage of total government expenditure ranges around 3.5 percent, albeit it surpassed 4 percent in 2021 and 2022.

2023

Share of GDP 1,45%
Share of total government
expenditure 3,60%

The Parliament regularly adopts budgets for the upcoming year, usually in November. Balance sheets and yearly Reports on defence are also regularly adopted by the Parliament, however the last one adopted was the Report for 2021, while the Report for 2022 is still in procedure, being submitted by the Government later than usual.

In 2021 there was a shift in defence budget structure in favour of arms and equipment, attributed to the Rafale purchase which still takes the largest portion of capital expenditure. Modernisation of the army foresees several other purchases from the US, such as Patria armoured vehicles and Javelin anti-tank guided missile system, confirming this trend. Since 2021, spending on personnel ranges around 42 percent. Despite changes in budget display since 2023, making the budget slightly less disaggregated and transparent, Croatian defence budget is at the top in the region when it comes to these categories. It shows to specific procurements broken down into subcategories.

2024 – Balkan Defence Monitor 
Defence Expenditures – Croatia

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Defence expenditure – Bosnia and Herzegovina – 2024

Although military expenditure of Bosnia and Herzegovina has increased comparing to previous years, it remains the lowest in the region – below 1% of GDP. 1

2022

Share of GDP 0,69%

Based on the federal budget for 2023 (adopted in April 2023), the initial defence budget is increased by  approximately 27%. However, the balance sheet for 2023 has not been adopted yet, but only the report on actual expenditure from January 1, 2023, until September 30, 2023. Based on that information, the military spending of Bosnia and Herzegovina does not seem to be significantly increased in 2023 either. The 2024 budget has not been adopted yet.

Traditionally, Bosnia and Herzegovina allocates the majority of its defence budget on personnel costs. The MoD has the largest number of employees among state institutions in the country and the highest share in the total amount of gross salaries. Still, the biggest turnover of personnel is evident at the MoD because of the implementation of provisions of the Law on the Armed Forces in Bosnia and Herzegovina related to the prescribed age limit. Namely, the Armed Forces of Bosnia and Herzegovina were in a transitional period starting from 2010 when the majority of military personnel were discharged from the Armed Forces due to age limit. The transition continued in the following years, which involves the dismissal of one generation of military personnel who reached the prescribed age limit and the admission of a new generation. For instances, until the end of September 2023, the total of 501 employees were discharged from the MoD, while 225 new employees were hired.3 The dynamics of hiring new military personnel significantly impacts the expenditure on personnel.

Arms and equipment expenses are documented in the budget and balance sheets under the aggregated category Equipment procurement, without providing further details on types of procurement. The MoD initiated multi-year projects which include overhaul of helicopters (for instance, repairs and overhaul of Gazelle helicopters or procurement of spare parts for UH-1H helicopters) and purchase of specialized motor vehicles. However, additional funds for these projects were not provided in 2023.

2024 – Balkan Defence Monitor
Defence Expenditures – Bosnia and Herzegovina

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Defence expenditure – Albania – 2024

Despite the notable growth in Albanian defence expenditure over the last five years, the expenditure remains below the NATO commitment of 2% of GDP for defence spending. Nevertheless, the planned budget for 2024 indicates a substantial increase compared to 2023, suggesting that the NATO goal should be reached in 2024. The defence expenditure’s share in Albania’s total government expenditure is continuously increasing. Based on the latest Budget Law amendments from 2023, it is planned to reach 9.18% of total government expenditure.

2023

Share of GDP 1,63%
Share of total government
expenditure 9,18%

The balance sheet for the year 2022 (adopted in May 2023) indicates a significant deviation from the initial budget, a variance not observed in the preceding years. The budget is usually underspent, which is a trend that appears to persist in 2023.

The defence budget structure is not evident from Albanian official documents that are publicly available, which is why the NATO database was used for this purpose. Personnel spending has significantly decreased in 2023, while the increase in arms and equipment spending is considerable.

During 2022 the salaries of the Albanian armed forces were increased by 30%. The increase will continue in 2023 by 7% for all ranks, which
explains the decrease in spending on personnel compared to 2022. In the beginning of 2023, Albanian Minister of Defence announced procurement of the unmanned combat aerial vehicles – TB2 armed drones, from the Turkish company “Baykar Technologies”, as well as building of the cyber field operational centre.

2024 – Balkan Defence Monitor
Defence Expenditures – Albania

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Defence expenditure – Serbia – 2024

The observed trend of rise in Serbian defence expenditure since 2016 halted in 2022, with expenditures falling below the figures recorded in 2021. As the balance sheet for 2023 has not been adopted yet, the actual military expenditure for the year remains unavailable. Nevertheless, based on the most recent amendments to the Budget Law, it is anticipated that military spending in 2023 will be on the rise again, constituting an 8.05% share of the total expenditure.

2023

Share of GDP 2,05%
Share of total government
expenditure 8,05%

The National Assembly usually adopts the budget for the forthcoming year in early December. The planned budget for 2024 is decreased by almost 1.3% comparing to 2023.

 

Serbian budget is broken down into programmes, presenting budget funds for specific areas as well as different sources of funds. Despite that, the budget is not sufficiently disaggregated and detailed, which prevents comprehensive oversight. For instance, arms and equipment costs are not disaggregated by concrete projects, and it is thus impossible to connect them to individual procurement projects. Within the programme “Functioning of the MoD and the Serbian Army” the largest part of the budget is spent on the purchase of arms and equipment, without specifying which arms and which equipment. It should also be noted that the operating costs, including costs of maintenance, spare parts, fuel, and everything that is needed for training, exercise, and general building capabilities, are relatively low compared to the amount spent on purchase of arms and equipment. The information about the procurements can usually be found in MoD’s announcements, such as the announcement about procurement and modernization of 92 complex combat platforms for the needs of the Serbian Armed Forces, but even in those sources of information further details cannot be found.

2024 – Balkan Defence Monitor
Defence Expenditures – Serbia

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Defence expenditure – Serbia – 2023

Serbian defence expenditure kept gradually rising since 2016, with a sharpest increase in 2021. Military spending took up an increasing share of the total expenditure, from 4% in 2017 to almost 8% in 2022.

The National Assembly usually adopts the budget for the forthcoming year in early December. Balance sheets presenting the actual budget spending were late for 16 years, and the National Assembly retroactively adopted all of them in 2019.

2022

Share of GDP 2.15%
Share of total government
expenditure 7.67%

The Serbian defence budget undergoes major changes as the year progresses. Resources are allocated from budget reserves, predominantly for arms and equipment. In the absence of extraordinary circumstances that would require extreme measures, such radical increases indicate
lack of comprehensive defence planning.

 

Serbia has been applying programme budgeting since 2015. The budget is therefore broken down into programmes, presenting budget
funds for specific areas as well as different sources of funds. Still, the budget is not sufficiently disaggregated and detailed, which prevents comprehensive oversight. For instance, arms and expenditure
costs are not disaggregated by concrete projects, making it impossible to connect them to individual procurements.

As can be seen from the budget structure, the upsurge in the military budget is the result of increasing arms and equipment costs, but also a gradual increase in personnel costs since 2021. In line with the above, a trend of decreasing the amount of other costs (which includes maintenance and operational costs) can be observed.

2023 – Balkan Defence Monitor
Defence Expeditures – Serbia

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Defence expenditure – North Macedonia – 2023

North Macedonian defence expenditure increased approximately 30% from 2017 to 2020. Further increases were planned after the country became a member of NATO in 2020. Before that, it was
spending roughly 1% on the military. Defence expenditure has taken up an increasing portion of the total government spending, from 2.7% in 2017 to 5.2% that was planned for 2023.

2022

Share of GDP 1.64%
Share of total government
expenditure 5.02%

The Assembly of the Republic of North Macedonia usually adopts budget laws in late December, while balance sheets are adopted regularly, with some occasional delays. The MoD regularly publishes semi-annual budget realisation reports.


North Macedonian defence budget changed in 2021, as the country signed the contract to buy Stryker light armoured vehicles. This purchase altered the budget structure in favour of arms and equipment.

Similar to other countries in the region, North Macedonia uses programme budgeting, which is not sufficiently disaggregated. Budgets and balance sheets show highly aggregated sums for different programmes, and sources of funding are presented for the entire MoD budget.

2023 – Balkan Defence Monitor
Defence Expenditures – North Macedonia

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Defence expenditure – Montenegro – 2023

Montenegrin defence expenditure experienced a big increase right after the country joined NATO, in 2018 and 2019, caused by the attempt to meet the commitments made to the Alliance. However, it went backx to its earlier level in 2020. Besides the pandemic, the change of government after the 2020 elections and the subsequent
political crisis have certainly also influenced the overall budget and defence planning for the forthcoming period.

2022

Share of GDP 1.64%
Share of total government
expenditure 5.02%

The Parliament adopted the 2021 budget after a delay of more than six months. Earlier, the Government would usually provide a budget proposal to the Parliament one month before the start of the next budget year. The Parliament has never adopted any balance sheet submitted by the government even, though it is legally required to do so.

 

Montenegro spends the greatest share of its defence budget on personnel. This trend was shortly interrupted by the increase in arms and equipment expenditure in 2018 and 2019, when Montenegro started the procedure to procure Bell helicopters and Oshkosh armored vehicles. Nevertheless, big leaps in defence spending during the year, allocated to arms and equipment, suggest a general lack of long-term defense planning in Montenegro.

Even though the Montenegrin budget demonstrates a slightly higher level of transparency than those of most countries in the region (i.e. it shows individual projects or procurement), it still lacks sufficient transparency and disaggregation.

* Data for 2021 and 2022 are based on the last changes in the 2021 budgets and the initial budget laws for 2022.

2023 – Balkan Defence Monitor
Defence Expenditures – Montenegro

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Defence expenditure – Croatia – 2023

Croatian military expenditure had a sharp increase in 2021, due to the to the contract signed for the purchase of 12 French Dassault Rafale fighter jets at the end of the year. Before that, the expenditure did not experience any large changes, either nominally, or as a military burden. Defence expenditure has taken up around 3.50% of the total governmentexpenditure until 2021.

2022

Share of GDP 1.67%
Share of total government
expenditure 4.35%

The Croatian Parliament regularly adopts the budget for the forthcoming year in late November or early December. The Parliament also regularly adopts balance sheets and yearly Reports on Defence.

The 2021 increase is entirely attributed to the Rafale purchase at the end of the year, which resulted in a rebalance and a 43% increase in the planned budget. Prior to that, there were no significant fluctuations during the year, and the initial budget was slightly underspent. Croatia spent the largest portion of its military budget on personnel; however, the above purchase changed the planned budget structure in favour of arms and equipment. The Croatian defence budget is the most transparent and disaggregated in the region. Unlike the budgets of other countries, it shows major procurements individually and breaks them down into subcategories.

The Croatian defence budget is the most transparent and disaggregated in the region. Unlike the budgets of other countries, the Croatian budget shows major procurements individually and breaks them down into subcategories.

2023 – Balkan Defence Monitor
Defence Expenditures – Croatia

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