Homeland security (HLS) expenditure expected to register a CAGR of 0.99% in the forecast period (2012-2016)

Tuesday 17 July 2012, Amsterdam

Venezuelan defense expenditure is expected to value US$4.9 bn in 2011, after registering a CAGR of -2.08% during the review period (2007-2011). In the forecast period, defense expenditure is expected to grow at a CAGR of 9.98% and value US$7.3 bn by 2016. Furthermore, Venezuela’s cumulative defense expenditure over the forecast period is expected to be US$29.7 bn, of which US$19.3 bn is expected to be invested in personnel, and the remaining US$10.5 bn on equipment and infrastructure development (reference graph).

During the review period (2007-2011), 76% of Venezuela’s total defense imports were from Russia and 10% were from Spain. Venezuela is subject to an arms embargo from the US, a factor which led to Russia and China being key import partners. Aircraft and missiles collectively accounted for 70.2% of the country’s total arms imports during the review period. As Venezuela plans to continue modernizing its armed forces, imports are expected to increase in the forecast period.

Venezuela has allocated just US$2.38 bn for defense expenditure in 2011, which is a barrier to foreign companies aiming to enter the Venezuelan defense market. Moreover, high corruption levels and the US arms embargo, which prevents the export of defense products to Venezuela, also limit market entry opportunities for foreign companies.