Chile increases defense budget

Chile increases defense budget by 3% in 2018

The Chilean Government has authorized an equivalent budget of 2.939 million USD to be applied to defense assigned to Chilean Army and other dependences.

A small summary of how this budget would be divided could be:

Concept USD Millions
Personal Expenses $1,885
Goods and Services $630
Social Security Benefits $5
Current Transfers $44
Taxes $113
Purchase of non-financial assets $45
Financial Assets $104
Investment Initiatives $6
Loans $7
Capital Transfers $64
Debts $12
Final Cash Balance $17
Other current expenses $5

In global this quantity represents a general increase of 3% of the Budget for the 2018 exercise compared to 2017, both we need to analyze in parallel that the Andean country had an inflation of 2,24% in this year (but with a clearly downhill tendency after the first semester of the year).

Some highlights of the distribution by the main defense related Institutions are:

Dirección General del Territorio Maritimo y de Marina Mercante (Directmar) (“General Directorate of the Maritime Territory and Merchant Navy”) would have $161,8 M increasing in 15,2 % from the previous year. $2,7 Million would be assigned to maintenance, Emergency Repairs with $831 K and $60 K to replace a Zodiac vessel and 1 lifeboat.

Armada de Chile (“Chilean Army”) will assign $402 K to vehicle purchase, $ 365 K for properties, $869 K for software and computational acquisitions, and $1.4 M for machinery. And related to our business we can highlight that for vessel maintenance this organization will have $ 17.5 M for that purpose.

For last in our brief recap the Fuerza Armada Chilena (“Chilean Air Force”) will have $418 M for the next year. Highlighting $5.2 M would be for maintenance, $30 M for oil and gas and an increment to $1,6 M only for shipping costs for supplies and parts to and from USA.

Written by Gerardo Gonzalez

Gerardo Gonzalez is Mechanical Engineer and a Supply Chain Management Expert

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