NATO’s military power and global influence could be put at risk if allies continue to slash their defence budgets while emerging powers boost theirs, NATO’s chief will warn on Thursday.

Anders Fogh Rasmussen is also expected to warn in his annual report, due out later on Thursday, that too deep defence cuts could worsen the West’s economic crisis by weakening defence industries that are key drivers of innovation, jobs and exports.

Rasmussen’s message will be that military power will remain essential if NATO wants to keep its people safe and retain global influence, NATO officials said.

He will urge allies to keep defence spending steady in 2013 and to spend more on the military once their economies pick up.

“He will make clear that we can’t expect security challenges to just go away while we are focused on fixing our economies. In fact, just the opposite. There is a risk that challenges will get more complicated, more complex, because the world out there is so unpredictable,” a NATO official, speaking on condition of anonymity, said.

The global financial crisis has forced many NATO allies into drastic measures to reduce their budget deficits, leading to sometimes sharp cuts in defence spending.

Only a handful of the 28 NATO allies - the United States, Britain and Greece - last year spent more on defence than the two percent of Gross Domestic Product target set by NATO.

Some could look to make further cuts once the NATO-led force ends combat operations in Afghanistan at the end of 2014.

Rasmussen will say in the report that NATO remains the world’s most important military power, with NATO countries still accounting for more than half of global defence spending.