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Brazil Defence and Security Report 2016

Brazil Defence and Security Report 2016

BMI View: We expect Brazilian defence expenditure to contract in 2016 amid the recession; however, itwill remain at around 1.3% of GDP, and return to growth over the medium term as economic conditionsimprove. Defence spending will be driven by factors such as the country's efforts to reduce crime levels,prevent illegal activities in the Amazon, and contribute to international peacekeeping missions. Brazil hasthe largest defence budget in the Latin America region, and is able to invest significantly into procurementof military equipment and defence R&D. This enables the domestic defence sector to continue to develop,increasing export potential, and gradually allowing it to capture a large share of the Brazilian MoD'sprocurement contracts. Over the long term, therefore, we expect defence exports to grow at a faster pacethan imports.

Recent Developments

We expect a second year of defence expenditure contraction in 2016 amid a worsening recession, asconsumers face headwinds stemming from a poor labour market and the fixed investment declinecontinues.

Over the medium-to-long term, meanwhile, with economic conditions allowing defence spending togrow, we expect the Brazilian defence ministry to address a range of its armed forces' requirements toreplace ageing equipment. This modernisation effort is likely to involve purchases of new militaryaircraft, armoured vehicles, warships, submarines and C4 equipment.


BMI Industry View
Table: Headline Defence Expenditure Forecasts (Brazil 2015-2020)
SWOT
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Brazil 2014 - 2019)
Table: Defence Expenditure (Brazil 2020 - 2025)
Armed Forces
Table: Armed Forces Personnel (Brazil 2006 - 2013)
Defence Trade
Exports
Imports
Industry Risk Reward Index
Defence Industry Risk Reward Index
Table: Latin America - Defence Industry Risk Reward Index
Rewards
Risks
Market Overview
Brazil Defence Market Overview
Domestic Defence Sector
Domestic Defence Market
Table: Defence Agreements
Brazil Security Overview
Domestic Threats
Regional Threats
International Threats
Company Profile
Avibras Indústria Aerospacial SA
Embraer
Forjas Tauras
Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Defence Risk/Reward Index Indicators
Weighting
Table: Weighting of Defence Risk Reward Index

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