In the forecast period there will be defense budget cuts in Belgium to reduce the country’s fiscal deficit, and this will hinder growth in its defense industry. Since Belgium procures the majority of its defense equipment from domestic companies, defense budget reductions are expected to impact both its domestic defense industry and defense imports negatively.
Imports are expected to decline due to defense budget cuts announced by the Belgian government whereas the government is expected to support defense export by way of large investment in advanced technology and R&D.
The defense budget personnel expenditure registered a CAGR of -3.23% during the review period due to the reductions in troop numbers. As a result of the global economic crisis and the high percentage of public debt in GDP, the Belgian government plans to reduce its fiscal budget over the forecast period, and this will result in further defense budget cuts. Consequently, there will be a decline in personnel expenditure as troop numbers are further reduced, leading to a predicted CAGR for personnel expenditure of 1.87% during the forecast period.