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.

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