Chile’s annual defence spending is expected to reach $3.4bn by 2022, witnessing a compound annual growth rate (CAGR) of 5.49%, according to a report by Strategic Defence Intelligence (SDI).
Titled ‘Future of the Chilean Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2022’, the report provides insights of the Chilean defence industry.
The defence budget was $2.6bn in 2017, registering a CAGR of 0.24% between 2013-17.
Chile’s homeland security (HLS) expenditure registered a CAGR of 0.63% during the 2013-17 period, with the expenditure in 2017 valued at $5bn.
The HLS expenditure is expected to reach to $7.1bn in 2022, anticipating a CAGR of 7.19% over the forecast period.
Maritime border disputes with Peru and Bolivia and the country’s active participation in international peacekeeping missions are expected to drive military spending.
The nation’s efforts to strengthen its forces with enhanced capabilities, equipment, technology and training will also affect expenditure.
Focus on bolstering internal security systems, platforms, surveillance systems, and joint military training will be a significant reason for budget growth during the forecast period.
A rise in defence imports is also anticipated.
The Chilean Ministry of Defense (MoD) supports joint ventures and technology-sharing agreements to allow companies to improve their capabilities and boost diplomatic relations between the nations.
This encourages original equipment manufacturers (OEM) from other countries to enter Chile’s defence market.