Defense Budget Forecast
The Brazilian defense budget has amounted to $21.8 billion in 2022, having registered a CAGR of -6.2% during the historic period. The defense budget increased by 1.9% annually in 2022, from $21.4 billion in 2021. There was a drastic reduction in the defense budget in 2020, when it was valued $21.6 billion, compared to $28.4 billion in 2019. This was attributed to the fluctuating exchange rate of the Brazilian real due to the economic crisis. As a result, the currency exchange rate of the Brazilian real into the US dollar increased considerably from 3.9 in 2019 to 5.2 in 2020. Nonetheless, it is anticipated that the defense budget will increase from $24.8 billion in 2023 to $31.4 billion in 2027 at a CAGR of 6.1%.
Drivers of Defense Expenditure
As per GlobalData’s Brazil’s Defense Market 2022-2027 report, internal issues such as the need to supply the military with the equipment required to tackle drug trafficking, arms smuggling, organized crime and modernization of the armed forces are the primary drivers of Brazil’s defense expenditure.
Armed gangs pose a serious state security threat, especially against the police. These gangs control the slum areas in the country’s major cities and are heavily armed. Time and again, the government has resorted to temporary military interventions in order to curb the rising gang crime rate.
Programs such as the submarine development program (PROSUB), the navy nuclear program (PNM), SIVAM/SIPAM amazon surveillance system projects, and SiMCosta coastal surveillance system project, among others, are being undertaken to strengthen Brazil’s stance against internal and external threats.
Armed gangs pose a serious state security threat, especially against the police. These gangs control the slum areas in the country’s major cities and are heavily armed. Time and again, the government has resorted to temporary military interventions in order to curb the rising gang crime rate.
Programs such as the submarine development program (PROSUB), the navy nuclear program (PNM), SIVAM/SIPAM amazon surveillance system projects, and SiMCosta coastal surveillance system project, among others, are being undertaken to strengthen Brazil’s stance against internal and external threats.
Access the full report here.
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