France Defence and Security Report 2015
BMI View: France possesses one the leading defence sectors globally, and local manufacturers - a growingnumber of which are entering into international product development partnerships - export items across theworld, in all segments of the industry. Domestic demand for defence equipment is increasingly being drivenby efforts to enhance internal and external counter-terrorism capabilities. In addition, substantial amountsof funding are required for the maintenance of a large navy engaged in the protection of the Frenchcoastline, overseas territories, trade and nuclear submarines as well anti-drug-smuggling, trafficking andpiracy missions. France's military expenditure therefore remains high in a global comparison - althoughbudget growth is limited. While the French defence ministry sources the vast majority of equipment incountry,certain products - such as UAVs - are still procured from the US.
Under the government's initial military spending programme for 2014-2019, the French defence budget wasset to remain static in nominal terms until 2016, after which it would rise gradually until 2019 - representingan overall decline in real terms. Another 24,000 defence jobs were to be slashed, as part of the government'sefforts to rein in public spending amid weak economic growth. However, following the attacks by Islamistmilitants against the offices of satirical magazine Charlie Hebdo in Paris in January 2015, PresidentHollande announced that austerity cuts to this year's budget would be cancelled, and sector spending wouldbe raised by EUR3.8BN (USD4.2bn) in 2016-2019 in order to strengthen counter-terrorismcapabilities. Planned defence expenditure - excluding pensions and the gendarmerie - therefore stands atEUR31.2bn (USD33.9bn) for 2015, and EUR32.7bn (USD35.6bn) at the end of our forecast period in 2019.
In order to meet these targets, the government intends to raise additional funds through the export ofmilitary equipment.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook