Germany’s defense industry is poised for significant growth in the immediate future as a result of an increase in defense spending as well as a massive project to modernize the country’s armed forces. The German government has announced plans to increase defense spending by more than 4% annually between 2024 and 2028, which is expected to boost the country's defense market by billions of dollars. One reason behind this budget increase lies in the country’s commitments to NATO. Germany has to meet requirements for the collective defense within NATO. The alliance’s 2% GDP spending target is expected to drive defense spending in Germany and other NATO member states in the coming years as is the case of France. One of the key drivers of Germany’s defense spending is the need to modernize its armed forces. The German military has suffered from years of budgetary cutbacks and poor management of funding, which has resulted in a decline in its capabilities. The promised increase in funding will allow the German military to purchase new equipment, such as fighter jets, warships and armored vehicles, and to modernize its existing systems. The changing security dynamics in Europe, the threat posed by Russia in particular, has also contributed to this shift. The war in Ukraine has highlighted the need for Germany to strengthen its military capabilities in order to deter aggression and protect its allies. In addition to conventional threats, Germany is also investing in cybersecurity to protect itself from cyberattacks. The country’s defense budget includes funding for the development of new cybersecurity technologies and the training of personnel as warfare moves into the digital realm and digital services become a necessity. The German government is also concerned about the threat posed by terrorism and extremism, which require a new series of measurements and equipment.