In Latin America, defence spending began to recover in 2024, after a pandemic-era decline. In 2025, the region’s nominal defence spending increased by 5.4%. There was also a real-time recovery, as aggregate spending has now reached pre-COVID levels.
Global defence spending in 2025 totalled $2.63 trillion, up from $2.48 trillion in 2024. This 2.5% increase, albeit a fall from the 7-8% growth seen in recent years, is still a record number. These ginormous figures are hardly surprising at a time when geopolitical tensions are heightened, and countries around the world are cautious of protecting themselves against aggression.
In Latin America, defence spending began to recover in 2024, after a pandemic-era decline. In 2025, the region’s nominal defence spending increased by 5.4%. There was also a real-time recovery, as aggregate spending has now reached pre-COVID levels. However, in larger military regions, growth was lukewarm, with Brazil and Colombia introducing low increases, prompting operational cuts.
In Mexico, the Ministry of National Defence (SEDENA) has set in motion a comprehensive force development plan outlined till 2050, focusing on the modernisation of the Mexican Army, Air Force, and National Guard. The Defence Minister General Ricardo Trevilla said that this government will prioritise the procurement of cargo aircraft, personnel transports, and helicopters as opposed to new fighter jets.
Mexico has short, medium and long-term procurement plans in place to ensure the operational readiness of the country’s defence personnel and equipment. The short-term acquisitions include a focus on support logistics, troop transport, and civil protection missions. Helicopter procurement is a high priority, as helicopters are multipurpose platforms used in both special and regular operations.
A multi-decade modernisation plan will be implemented gradually and in accordance with the federal government’s budgetary capabilities. The long-term goal is to improve aerial surveillance capabilities and bolster national defence by integrating next-generation technologies. The Mexican Air Force is still training pilots and technical staff for upcoming aircraft platforms to aid in that transition.
SEDENA will continue to support the Army and National Guard through both foreign purchases and domestic production capabilities, including its military industrial facilities and clothing and equipment manufacturers. To meet technical and operational requirements, however, aircraft assets and specialised operational equipment will still be purchased through regular external procurement procedures.
Growing geopolitical changes have also prompted Brazil to rethink its defence sector strategy, which presently accounts for 4.5% of the country’s GDP. However, there is a glaring lack of research centres, universities, private companies and most of all, coordination among the armed forces. The defence budget is higher despite Brazil’s worsening financial situation.
The government understands that the defence sector is not limited to producing war equipment such as armoured vehicles, firearms, and missiles, but is also important for developing strategic technologies such as robotics, cybernetics, automation, and electronic systems. Brazil has never engaged in direct armed conflict in decades, but a strong defence sector acts as a deterrent against external aggressions, and also reduces reliance on foreign technologies at a time when geopolitical alliances are swiftly swaying.
Industry experts have emphasised the country’s need to strengthen its Defence Industrial Base (BID). BID is a coordination of private and public sector organisations and research centres which focus on the strategic development of the defence sector. Like Mexico, Brazil also needs to modernise its armed forces, strengthen adjacent and relevant sectors, and integrate the defence sector into its national development plans.
According to Brazil’s Ministry of Defence, one of the government’s key goals is strengthening the BID. While Brazil has always been a military equipment producer, the sector’s growth has remained inconsistent. Companies like Embraer and Helibrás are global exporters, but the BID network’s growth must not be limited to large companies alone and must focus on building a solid supply chain.
The three main factors which must be considered while implementing the BID are operational capacity, local manufacturing, and price. If the first two are viable, and the price is unfavourable, then BID is unlikely to succeed.
In 2025, Brazil’s $23.9 billion defence budget and a 13% year-on-year increase made it the highest defence spender in South America. This YoY increase has been attributed to Embraer’s F-39E Gripen program’s progress and the government’s initiative to strengthen the defence industrial base.
Yet another country which has recorded one of the steepest relative rises in the LatAm region is Uruguay. The country’s defence budget has gone from $320.9 million in 2020 to $577.2 million in 2025, marking an 80% increase over five years. A historically under-militarised country, analysts have assessed that Uruguay has increased its defence capabilities through equipment renewal programs and tasks tied to monitoring the exclusive economic zone.
Argentina, like its regional peers, also plans to modernise its armed forces. The government said 10% of the revenue from the sale or lease of state assets will be used to modernise the armed forces. 10% of the earnings from privatising companies with state shareholdings will also be directed towards the same cause. This figure could rise to 70% if the asset falls under the Defence Ministry.
The Argentine government originally planned to privatise over 40 companies, but has so far only privatised IMPSA, a company dedicated to producing turbines, which had been nationalised in 2021. The government is also privatising a railway line, energy companies, waterworks and airport freight companies. Based on these privatisation plans, it is likely that the earnings going towards the armed forces could be increased from 10% after a few years.
The world is becoming more cautious, as evidenced by the consistent increase in defence spending, which is especially noticeable in Latin America. These countries are transitioning from short-term maintenance to long-term, strategic modernisation as regional investment returns to pre-pandemic levels.
The goal is obvious, whether it is achieved through Argentina’s innovative privatisation finance, Brazil’s focus on its BID, or Mexico’s targeted multi-decade logistics plan. In order to protect their sovereignty in an uncertain and quickly changing global geopolitical environment, LatAm countries are concentrating more on deterrence, technical independence, and structural preparation.
