Venezuelan defense expenditure is expected to value US$5.3 billion in 2013 after registering a CAGR of 10.5% during the review period (2008-2012). In the forecast period (2013-2017), defense expenditure is expected to grow at a CAGR of 11.98% and value US$8.4 billion by 2017. Furthermore, Venezuela’s cumulative defense expenditure over the forecast period is expected to be US$33.1 billion, of which US$22.8 billion is expected to be invested in personnel, and the remaining US$10.4 billion on equipment and infrastructure development.
During the review period, 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$4.9 billion for defense expenditure in 2012, 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.