Brazil’s annual military expenditure stands at $19.3bn in 2016, and is anticipated to reach $20.5bn by 2021 at a compound annual growth rate of 4.08%, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Brazilian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021’, the report forecasts the future trends of the Brazilian defence industry.
The allocation for the country's capital expenditure is projected to average at 6.2% of its defence budget from 2016-2021, whereas revenue expenditure allocation is anticipated to be 93.8%.
Defence spending is expected to be increased by the Brazilian Ministry of Defence’s (MoD’s) initiatives to substitute its aging military systems and equipment, as well as procure new equipment to protect its resources from illegal mining, deforestation, and drug trafficking.
The Brazilian MoD plans to invest in the latest technology to strengthen its domestic defence industry, thereby reducing dependence on foreign original equipment manufacturers (OEMs), says the report.
The modernisation of defence systems is expected to drive arms imports. Meanwhile, a low allocation for defence capital expenditure and procurement delays are expected to hinder the growth of the Brazilian defence sector.