Tuesday 16 April 2013, Amsterdam
The Norwegian defense budget is expected to grow at a CAGR of 4.62% over the forecast period (2014-2018) and to reach US$9.31 billion in 2018; this significant increase in defense expenditure can be attributed to the modernization of its armed forces and the procurement programs that are executed over the forecast period. In addition, participation in a number of UN peacekeeping operations is also expected to fuel the Norwegian defense expenditure during the forecast period. As a percentage of GDP, the country‘s defense expenditure stood at 1.4% in 2013, which is expected to increase to 1.6% in 2018 as a result of the government‘s effort to increase the operational capability of the Norwegian armed forces during the forecast period.
The Norwegian Ministry of Defence (MoD) is expected to increase its capital expenditure from US$1.59 billion in 2013 to US$2.43 billion in 2018 in an effort to modernize its Armed Forces; in addition, revenue expenditure is also expected to increase, from US$5.59 billion in 2013 to US$6.89 billion in 2018. This increase in revenue expenditure can be attributed to the additional training and development programs of military personnel that are to be undertaken over the forecast period.
Figure 1: Norwegian Defense Expenditure ($US billion), 2009-2013
Other expenses, which include the expenses of Norwegian Forces Abroad, Common Institutions and expenses under the Headquarters Command, Common Management, and Command Structure, accounted for the highest budget allocation during the review period (2009-2013), with an average of 31.9%.The Norwegian Army received an average allocation of 15.8% during the review period, followed by the Air Force at 12% and the Navy at 9.6%.
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