The Argentine Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016

Lon­don, April 3rd, 2012 – The Argen­tine defense bud­get stood at US$2.96 bil­lion in 2011, the result of a CAGR of 16.55% dur­ing the review peri­od and this robust growth was pri­mar­i­ly dri­ven by high per­son­nel turnover in the armed forces. The gov­ern­ment announced a 21% wage increase in the salaries of the armed forces in 2010. In 2012 the defense bud­get is esti­mat­ed at US$3.64 bil­lion and is expect­ed to reg­is­ter a CAGR of 16.40% dur­ing the fore­cast peri­od to reach US$6.68 bil­lion by 2016. This robust growth is a result of the need to mod­ern­ize the Argen­tine armed forces fol­low­ing decades of under­in­vest­ment after defeat in the Falk­lands war in 1982, and the col­lapse of the Argen­tine econ­o­my in 2001. The gov­ern­ment intends to increase the defense bud­get of the coun­try from 0.7% of GDP in 2011 to 1.5% of GDP and while the time peri­od for doing so is unclear, it is esti­mat­ed that the defense bud­get will increase to 1.2% of GDP by 2016. 

Click to enlarge
Here you can find more infor­ma­tion about: 

Dur­ing the review peri­od cap­i­tal expen­di­ture was allo­cat­ed an aver­age of 3.6% of the defense bud­get and this low allo­ca­tion was due to the high expen­di­ture on salaries and pen­sions, which account for 70% of the defense bud­get. How­ev­er, mod­ern­iza­tion plans are expect­ed to increase cap­i­tal expen­di­ture to an aver­age of 7.2% of the defense bud­get dur­ing the fore­cast period.

Argen­tine defense expen­di­ture is rel­a­tive­ly small and stood at US$2.96 bil­lion in 2011, low­er than large spenders such as its neigh­bour Brazil, which spent US$36 bil­lion in the same year. Despite being the low­est spender in South Amer­i­ca, Argen­tine defense expen­di­ture is expect­ed to reach US$6.7 bil­lion, although this is still rel­a­tive­ly low com­pared to the largest spenders worldwide.

Argen­tine defense imports peaked in 2007 but declined in sub­se­quent years due to eco­nom­ic con­straints forc­ing the gov­ern­ment to post­pone defense mod­ern­iza­tion plans. How­ev­er, dur­ing the fore­cast peri­od, imports are expect­ed to increase with the resump­tion of the mod­ern­iza­tion plans. The US accounts for the major­i­ty of imports, with coun­tries such as Spain, Rus­sia, Brazil and Aus­tria also export­ing equip­ment to the Argen­tine armed forces, although the US is expect­ed to con­tin­ue to dom­i­nate the mar­ket dur­ing the fore­cast peri­od. Air­craft and sen­sors were the largest import cat­e­gories dur­ing 2007–2011 and are expect­ed to con­sti­tute the major­i­ty of imports over the fore­cast peri­od. Rus­sia is expect­ed to enter the mar­ket through the sup­ply of trans­port heli­copters, the planned pur­chase of train­ing heli­copters from BELL, trans­port air­craft and fight­er air­craft. The domes­tic defense indus­try pos­sess­es lim­it­ed capa­bil­i­ties result­ing in neg­li­gi­ble exports. 

About ICD Research

ICD Research is a full-ser­vice glob­al mar­ket research agency and pre­mi­um busi­ness infor­ma­tion brand spe­cial­iz­ing in indus­try analy­sis in a wide set of B2B and B2C mar­kets. ICD Research has access to over 400 in-house ana­lysts and jour­nal­ists and a glob­al media pres­ence in over 30 pro­fes­sion­al mar­kets enabling us to con­duct unique and insight­ful research via our trust­ed busi­ness com­mu­ni­ties. Through its unique B2B and B2C research pan­els and access to key indus­try bod­ies, ICD Research deliv­ers insight­ful and action­able analy­sis. The ICD Research sur­vey capa­bil­i­ties grant read­ers access to the opin­ions and strate­gies of key busi­ness deci­sion mak­ers, indus­try experts and com­peti­tors as well as exam­in­ing their actions sur­round­ing busi­ness priorities. 

Team GlobDef

Seit 2001 ist im Internet unterwegs, um mit eigenen Analysen, interessanten Kooperationen und umfassenden Informationen für einen spannenden Überblick der Weltlage zu sorgen. war dabei die erste deutschsprachige Internetseite, die mit dem Schwerpunkt Sicherheitspolitik außerhalb von Hochschulen oder Instituten aufgetreten ist.

Alle Beiträge ansehen von Team GlobDef →