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May 22, 2020updated 21 May 2021 11:40am

COVID-19 to impact defence budgets: Poll

The COVID-19 pandemic has forced governments to focus their spending on healthcare and safeguarding the economy, which could possibly result in shifting priorities away from defence.

The COVID-19 pandemic has forced governments to focus their spending on healthcare and safeguarding the economy, which could possibly result in shifting priorities away from defence. Some Asian countries have already announced cuts to their defence budget for the year.

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Verdict has conducted a poll to assess whether defence budgets will be shielded by the impact of the COVID-19 outbreak.

When asked whether defence budgets will be shielded from a COVID-19-induced downturn, 69% of the respondents anticipated at least a partial impact of the coronavirus outbreak on defence spending.

While a majority 45% of the poll respondents voted that the COVID-19 outbreak will have an impact on defence budgets, less than a quarter (24%) of the respondents felt the impact would be partial.

Less than one-third (32%) of the respondents opined that COVID-19 will not have any impact on defence budgets.

Analysis of the poll results, thus, shows that the outbreak is expected to impact defence budgets, at least in the near-term.

Defence budgets COVID-19 downturn

The analysis is based on 1,406 responses received between 04 May and 18 May.

How COVID-19 affects defence budgets

The global defence spending exceeded $1.9tn in 2019 marking the highest since 1988, according to a research conducted by Stockholm International Peace Research Institute (SIPRI).

In 2020, the world is battling to overcome the devastation caused by the COVID-19 pandemic forcing governments to shift their priorities towards other areas of the economy. The SIPRI, based on data from previous economic downturns, notes that future defence expenditure is expected to be impacted.

India and Thailand are some of the first countries to have announced a reduction in defence expenditure amid the COVID-19 crisis.

The Philippines is expected to increase its defence expenditure at 9.41% between 2021 and 2025, although expenditure may be impacted in the short-term due to COVID-19, says GlobalData.

China is also expected to grow its defence budget despite the impact of the pandemic, although official figures are yet to be announced.

NATO experts see the need to maintain defence spending

Experts such as NATO Secretary General Jens Stoltenberg and EU’s chief diplomat Joseph Borrell have, however, highlighted the need to keep up defence expenditure despite the uncertain economic conditions.

In an article published on EURACTIV, Borrell noted that although the focus is on economic recovery, EU member states should focus on securing funding for defence as the pandemic has brought new security threats.

Stoltenberg also noted that NATO members should ensure defence spending is maintained in order for them to defend themselves, as quoted by Reuters.

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Navigate your business through the ‘new normal’

COVID-19 continues to dominate headlines the world over. It has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities.  Faced with an explosion of conflicting information on how to plan and implement successful recovery strategies, decision-makers are in dire need of a single, reliable source of intelligence.   GlobalData’s COVID-19 Executive Briefing gives you access to unparalleled data and insights to successfully navigate the uncertain road to recovery across the world’s largest industries. Understand every aspect of this disruptive theme by delving into: 
  •  COVID-19 infection update, with statistics on the spread, testing by country, as well as the latest data on vaccines and therapeutic developments 
  • Economic impact overview, covering stock market indices, GDP, unemployment rates, policy responses & GlobalData’s economic recovery scorecards 
  • Sector developments, with access to sector insight summaries, cross-sector indices and the leaders and laggards in each industry vertical 
Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today. 
by GlobalData
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