Saudi Arabia to become fifth largest defence spender as the nation has been spending increasingly in the military sector to combat the volatile security situation in the Middle East.
Strategic Defence Intelligence (SDI) has predicted that the Saudi’s military expenditure will reach US$56.7 billion in 2015 and is expected to grow at an estimated CAGR of 8.35% over the next five years, reaching US$87.2 billion in 2020.
“Saudi Arabia is making rapid strides in the military sector by becoming the fifth largest defence spender in the world,” says Karthik Devisetty, analyst at SDI.
The growing military expenditure is supported mainly by Saudi Arabia’s oil-reliant economy as the nation is in possession of 17% of the world’s proven petroleum reserves and generates 80% of its worldwide budget revenues.
The driving factors for defence procurement in Saudi Arabia are arms race in Middle East, Iran’s threat, turbulence in Syria and Iraq as well as Yemen.