The German defence market, with a budget valued at US $41.4 billion in 2012, is one of the largest defence markets worldwide.
Since 2007 defence expenditure has declined at a CAGR of -0.17% and is expected to continue to do so, with a marginal decline of CAGR -0.72% forecast through to 2017, to reach an annual expenditure of $39.5 billion in 2017.
The German defence market faces threats from neighbouring countries and terrorist organisations, which require modernisation of their armed forces amid budget reductions.
The country's slow economic growth will continue to pressurise the German government to decrease its military spending between now and 2017.
As a result of the European debt crisis and subsequent budget cuts, the German MoD is expected to reduce its expenditure on military aircraft and other arms contracts over the next four years.
Ships and armoured vehicles have been the main segments in defence exports by Germany since 2007. In the years since, Germany has been exporting defence products to 58 countries with a total value of $11.8 billion. Exports declined in 2011, mainly the result of technical reasons, but defence exports are expected to recover through to 2017 with domestic defence companies.
For more information on the German defence market, see the latest research: German Defence Market Report
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