Colombia Defence and Security Report 2017
Colombian military expenditure will return to modest growth in USD terms in 2017, asrecovering oil prices result in easing pressures on the government to undertake fiscal consolidation.However, defence spending will increase more robustly over the medium-to-long term, reflecting persistentsecurity threats posed by tensions with neighbouring countries (namely Venezuela) and the ongoing fightagainst drug trafficking and related crime. We expect defence expenditure to remain above 3.0% of GDPover the coming decade. Colombia will maintain a large defence trade deficit for the foreseeable future,given the highly underdeveloped nature of its local defence sector. The government is seeking to improvethis trade balance through the development of the local defence sector; however, efforts are somewhatconstrained by a limited defence budget.
Although fiscal pressures on the Colombian government to undertake fiscal consolidation are easing in2017, amid the recovery in oil prices, we expect only modest growth in defence expenditure in 2017. Thisis as public finances remain under strain and as the government prioritises social spending in ruralcommunities following the signing of an agreement with the FARC in November 2016.
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