MercoPress. South Atlantic News Agency

Brazil to spend nearly three-quarters of its 2027 defence budget on personnel and pensions

Of the total, about 12.7 billion reais is for investment and 21.7 billion for operating costs. The proposal must be approved by Congress

Brazil plans to allocate 147.68 billion reais to defence in 2027, about US$27 billion at current exchange rates, but 73% of that will go on salaries, retirement benefits and pensions, according to the budget bill sent to Congress. With only 8.6% set aside for investment, the country will have to decide the pace of programmes that include fighter jets, frigates, armoured vehicles and a nuclear-powered submarine.

Of the total, about 12.7 billion reais is for investment and 21.7 billion for operating costs. The proposal must be approved by Congress. The recent depreciation of the real, which lost more than 8% against the dollar after Luiz Inácio Lula da Silva’s re-election, also makes imported components more expensive.

According to defence analyst Andrei Serbin Pont, who reviewed the programmes in an analysis for the Infobae website, the Brazilian Air Force expressed interest in June in buying another 20 Gripen E/F fighters from Sweden’s Saab, in addition to the 36 already contracted, with possible production at Embraer’s plant in Gavião Peixoto, São Paulo state; the order has not been confirmed. The Navy signed a memorandum of understanding on April 24 with Embraer and Germany’s TKMS to build four more Tamandaré-class frigates, and is considering larger ships from France, Italy, South Korea or the United Kingdom, including the possible purchase of second-hand British Type 31 frigates.

The programme hardest hit is the nuclear-powered submarine, whose launch has reportedly slipped from 2034 to 2038 due to funding difficulties, according to the analyst. The Army, for its part, has again postponed the selection of new armoured vehicles and a medium tank, and is negotiating the purchase of ATMOS 155 self-propelled howitzers through a consortium with Brazilian company Avibras. Brazil is also seeking a government-to-government agreement with Italy for its air defence programme, with the participation of European consortium MBDA.

“There is no weapons system Brazil is acquiring today that really alters the balance of power at regional level,” Serbin Pont said. The analyst highlighted continued defence cooperation with Argentina, including joint exercises such as Arandú, and noted that Embraer’s KC-390 transport aircraft is an option to replace the Argentine Air Force’s C-130s; Argentina has also evaluated the ATMOS howitzers. Decisions will depend on the new leadership of the Defence Ministry, which will change with the start of Lula’s fourth term on January 5.