Jane's Press Releases

Brazilian defence programmes face lowest acquisition budget in ten years

02 April 2019

  • Brazil’s annual defence budget was set at USD27.5 billion in 2019, real growth of 2.1 percent year on year.
  • However, its defence procurement allocation was just USD1.3 billion, more than USD1 billion less than 2012 in real terms.
  • Despite rising total spending, funding for equipment purchases fell dramatically last year, and now accounts for a historic low of just 5 percent of total military expenditure.
  • The country’s main challenge is its extremely high personnel costs, which have grown from 71 percent of spending in 2012 to 81 percent of this year’s allocation.
  • With Brazilian state spending constitutionally pegged to the rate of inflation, further growth in topline defence spending will be difficult to achieve.

Constrained expenditure to bounce back within coming five years

As Brazilian defence procurement expenditure has become increasingly constrained by topline budget cuts and escalating salary, pension and welfare costs, available funding has been focussed on existing programmes. Although many of these have suffered significant delays, they enjoy a relatively high level of commitment from government.

In 2017 and 2018 Brazil’s ten largest acquisition and development programmes consumed over 70 percent of the country’s procurement budget. Although this fell to 65 percent this year, this was largely due to funding cuts affecting even some of these key priorities.

However, Jane’s Defence Budgets forecasts gradual recovery in Brazilian acquisition expenditure, assisted by renewed efforts to achieve public sector pension reform, taking annual spending back above USD2 billion within five years.

(242 words)


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