Denmark's defence budget will be affected by the country's weak fiscal condition and Europe's long economic recovery, foresees a report by Strategic Defence Intelligence (SDI).

Titled ‘Future of the Danish Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022’, the report forecasts the Danish defence budget to reduce to $2.81bn by 2022, at a negative compound annual growth rate (CAGR) of -1.2%.

Denmark has seen cuts in its military expenditure from 2015 to 2017, following the Ministry of Defence’s (MoD) mandate to save $500m a year on defence expenditure with the objective of reducing the country’s debt.

“The nation’s defence expenditure registered a declining growth rate of -7.96% from 2013 to 2017."

The nation’s defence expenditure registered a declining growth rate of -7.96% from 2013 to 2017.

SDI forecasts the same trend to continue, with defence expenditure as a percentage of GDP forecasted to reduce from 0.96% in the current year to 0.72% at the end of the forecast period.

Expenditure on homeland security also declined at a CAGR of -6.18%, from $3.2bn to $2.5bn, between 2013 and 2017. However, this is expected to increase over the next five years at a CAGR of 0.54%, due to efforts to counter internal security threats and spending on border defence.

The nation is expected to spend on acquiring surveillance and intelligence technologies, automated border crossing systems, and CCTV systems, states the report.