This is a best prospect industry sector for this country. Includes a market overview and trade data.
Overview
The Czech Republic became a member of NATO in 1999. To a large extent the Czech Army (CzA) still uses inventory dating back to the times of the Warsaw Pact. Replacement of obsolete equipment to comply with the NATO standards is a priority of the Czech Army. Some major acquisitions have started but were complicated by the Covid pandemic. Russia’s aggression against Ukraine accelerated defense spending and modernization.
Planned MoD budgets were originally roughly $3.8 billion (CZK 89 billion) and $4.3 billion (CZK 100 billion) in 2022 and 2023 respectively. The Czech Government approved an additional CZK 22.7 billion for MoD for the necessary modernization of the Czech Army and the development of defense capabilities in the context of the ongoing aggression of the Russian Federation in Ukraine. The Ministry of Defense will manage a total amount of CZK 111.8 billion in 2023, which accounts for 1.5 percent of GDP. This is an increase from 1.3 percent in 2022. The government endeavors to spend two percent of its GDP on defense by 2025 at the latest, thus fulfilling its membership commitment to NATO.
During the full year before Covid, 90 percent of purchase agreements worth $1 billion were signed with local companies; nevertheless, the total value of contracts awarded was more than $2 billion. A vast majority of public contracts awarded are administered as restricted tenders, i.e. only pre-selected companies are invited for bidding.
(In thousands of dollars)
|
End-Use Code |
Value 2018 |
Value 2019 |
Value 2020 |
Value 2021 |
|---|---|---|---|---|
|
(50000) Military aircraft, complete |
0 |
0 |
0 |
0 |
|
(50010) Aircraft launching gear, parachutes, etc. |
1,338 |
7,008 |
633 |
1,085 |
|
(50020) Engines and turbines for military aircraft |
15,102 |
12,633 |
13,458 |
13,057 |
|
(50030) Military trucks, armored vehicles, etc. |
126 |
248 |
232 |
2,238 |
|
(50050) Tanks, artillery, missiles, rockets, guns and ammunition |
1,981 |
5,074 |
2,345 |
3,032 |
|
(50060) Military apparel and footwear |
462 |
433 |
1,266 |
132 |
|
(50070) Parts for military-type goods |
5,301 |
2,163 |
4,583 |
4,238 |
Source: U.S. Census Bureau - Foreign Trade Statistics, Products by 5-digit End-Use Code
https://www.census.gov/foreign-trade/index.html
Leading Sub-Sectors
The newest conceptual documents, “Concept of the Build-up of the Armed Forces of the Czech Republic 2030“and “The Long-term Perspective for Defense 2030” describe the political and military ambitions of the Czech Republic. The documents specify both strategic and non-strategic projects with a price tag of over $4 billion. Updates can be found at MoD’s web pages.
Opportunities
Trade Events
IDET 2023
May 24-26, 2023
NATO Days & Czech Air Force Days 2023
September 16-17, 2023
Future Forces Forum
October 16-18, 2024
https://www.future-forces-forum.org
Resources
Ministry of Defense of the Czech Republic
Ministry of Defense of the Czech Republic, Armaments and Acquisition Division
U.S. Commercial Service Contact: Zdenek.Svoboda@trade.gov.