Saudi Arabia has one of the highest defense expenditures relative to its gross domestic product (GDP), driven by a combination of regional security challenges, economic diversification goals, and the desire to assert itself as a major player on the global stage. The country introduced Vision 2030 in 2016, with an aim to develop a self-sustaining domestic defense industry, foster technological innovations, and build strategic partnerships that could collectively enhance its defense capabilities. As a result, Saudi Arabia’s defense expenditure is set to experience a compound annual growth rate (CAGR) of 4.5% over 2024–28, reaching $86.4bn in 2028, forecasts GlobalData, a leading data and analytics company.
GlobalData’s latest report “Saudi Arabia Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28,” reveals that Saudi Arabia’s defense budget recorded a 5.7% increase to $69.1 billion in 2023. The increase in the defense budget is attributed to the continued investment in strategic procurement programs, including military fixed-wing aircraft, missiles and missile defense systems, and naval vessels.
Rouble, Aerospace & Defense Analyst at GlobalData, comments: “Saudi Arabia is located in a volatile region marked by territorial conflicts and terrorism, which necessitates a robust defense expenditure to safeguard its sovereignty and protect vital assets such as oil infrastructure. By aligning defense modernization with strategic interests, the country aims to fortify its position as a key player in the Middle East’s security landscape. Its defense expenditure as a percentage of GDP averaged 7.9% over 2019–23.”
Saudi Arabia’s determination to enhance its defense capabilities is evident from the series of procurement programs for military platforms undertaken in recent years. The procurement of advanced platforms such as the Eurofighter Typhoon aircraft, the Patriot Advanced Capability-3 (PAC-3) missile system, and the modernization of the F-15SA fleet underscore the country’s commitment to enhance air superiority and missile defense capabilities.
Rouble adds: “Saudi Arabia is heavily modernizing its aerial capabilities with a specific emphasis on strike platforms. The country plans to integrate a number of advanced sensors and radars into its in-service F–15 fighters and Eurofighter Typhoons over the coming years. The integration of these advanced capabilities into its multi-role fighter aircraft would significantly enhance the country’s air defense and military prowess. With modern avionics, radar systems, and versatile weaponry, the fighter jets would bolster Saudi Arabia’s ability to respond to a range of threats and undertake various missions, from air superiority to ground attack.”
Additionally, the Saudi Arabian Navy is expected to induct an array of advanced equipment to enable it to transition from a Brown Water Navy to a Green Water Navy. The country is modernizing its eastern naval fleet under the Saudi Naval Expansion Program II (SNEP II) program, which aims to procure a fleet of corvettes, littoral combat ships, and offshore patrol vessels to guard its vital shipping routes and maritime resources.
Rouble concludes: “Vision 2030 will act as a power push to boost Saudi Arabia’s domestic defense manufacturing base as the country plans to localize more than half of its defense equipment needs and develop its own defense industrial complex. To achieve self-sufficiency in defense manufacturing, the country has been promoting its domestic companies to engage in joint ventures, strategic partnerships, and collaborations with international manufacturers, which will in turn assist in acquiring foreign technology and propel local production.”