Chile’s defence spending, estimated at $1.6bn in 2016, is expected to be $2.4bn in 2021, marking a compound annual growth rate (CAGR) of -0.99% over the forecast period, according to a report by Strategic Defence Intelligence (SDI).
Titled 'Future of the Chilean Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021', the report states that the decreasing overseas engagements of the nation, including its peacekeeping mission in Haiti, are anticipated to reduce defence spending from 2016 to 2021.
The handover of the Carabineros de Chile and Investigations Police of Chile to the Ministry of Interior and Public Security (MoIPS) in 2011 reportedly led to a decline in defence expenditure over the last five years.
Meanwhile, major factors contributing to defence expenditure over the next five years will include the maritime border dispute with Peru and Bolivia, planned acquisitions of modern equipment, technology and command systems, and new training initiatives, adds the report.
The procurement of multi-role aircraft, naval air defence systems and military helicopters are expected to largely eat up 28.5% of the total budget, whereas the recruitment of additional troops, and training and development programmes are anticipated to attract a revenue expenditure of 71.5% over the forecast period.