UK defence expenditure to decrease 2.04% to 2017 says new research

According to the report ‘The UK Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017’ during the review period UK defence expenditure decreased at a CAGR of 2.41% and was valued at $61.91 billion in 2012. Counter measures for potential terrorist threats and supported peacekeeping operations across the globe, particularly inAfghanistanandIraq, stimulated expenditure. Such factors are expected to continue to drive defence expenditure over the forecast period. However, expenditure is projected to decrease at a CAGR of -2.04% to reach US$52.21 billion by 2017. TheUKdefence budget, which comprised 2.5% ofGDPin 2012, is expected to decline to 1.6% ofGDPby 2017 due to budget reductions.

The capital expenditure allocation of theUK’s defence budget, which stood at an average of 24.7% during the review period, is projected to decrease to 23.8% over the forecast period. Defence capability expenditure accounted for the highest budget allocation with an average of 90.2% of the total budget during the review period, and is expected to constitute 91.2%, over the forecast period. Defence capability includes expenditure to meet the MoD’s operational support and logistics services costs, alongside the cost of providing equipment required by defence policy.

View the report: The UK Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017

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