Expenditure in the Venezuela defence market recorded a CAGR of 7.82% during the review period and is expected to value US$5.7 billion in 2013. Modernization activities and border disputes drove expenditure during the review period, and both factors are expected to continue to be drivers throughout the forecast period. Defence expenditure in Venezuela is expected to register a CAGR of 11.37% and reach a value ofUS$8.0 billion by 2018.
As a percentage of gross domestic product (GDP) the Venezuelan defence budget stood at 1.64% in 2013, and is expected to increase to 2.08% of GDP by 2018, largely due to the expected increase in defence expenditure. The capital expenditure allocation of the Venezuelan defence budget, which stood at 41.6% during the review period, is expected to increase to 68.9% during the forecast period, as a result of increased budget allocation for equipment purchases.
Consequently, revenue expenditure is likely to decrease from 58.4% in the review period to 31.1% in the forecast period. Key opportunities for equipment suppliers are expected in the areas of fighter and multi-role aircrafts, transport and utility aircraft, and attack aircraft. Other areas expected to provide opportunities for equipment suppliers are the purchase of main battle tanks, diesel electric submarines, as well as surface-to-air and surface-to-surface missiles.
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