Germany to trim munitions spending in blow for Rheinmetall

Germany plans to reduce spending on munitions next year in favor of other defense applications, potentially adding to challenges facing industry heavyweight Rheinmetall.

The draft 2027 budget, which the government may still amend, shows outlays for munitions at around €9.6 billion ($10.9 billion) in 2027, down from €11 billion in 2026, according to a copy seen by Bloomberg. Overall German defense spending is set to rise sharply through 2030.

Rheinmetall has fallen out of favor among investors and its shares dropped over 30% this year. The company’s long-lauded focus on tanks and artillery means it’s now losing out to firms providing the drone technology that’s proven indispensable in the Ukraine and Iran wars.