BMI View: According to a report published in April 2014 by the Stockholm International Peace Research Institute, Saudi Arabia is in the top 23 spenders on arms, having more than doubled its military expenditure since 2004, the organisation states. In 2014, we expect Saudi Arabia to spend USD59.2bn on defence. By 2018, we expect Saudi Arabia to have increased its defence expenditure to USD72.7bn.
The country has a low risk of becoming involved in a major international conflict, although it does face a slightly higher risk of terrorist attack, the country does not face a particularly high risk of experiencing major criminal activity.
During a meeting between US defence secretary, Chuck Hagel and Saudi Arabia's defence minister, Crown Prince Salman bin Abdul Aziz, in May 2013 held in Jeddah, the two countries agreed to deepen their cooperation in the field of ballistic missile defence, maritime security and cyber defence. Moreover, as a reflection of the improving relationship between Saudi Arabia and Iran, Riyadh invited the Iranian foreign ministry to visit the country in May 2014. It has not been confirmed whether Iran has responded to the invitation.
Regarding defence procurement, in June 2014 Swiss aircraft manufacturer Pilatus commenced deliveries of its PC-21 turboprop lead-in trainer to the Royal Saudi Air Force. An initial batch of six aircraft left the company's factory in June 2014 bound for Saudi Arabia. The Royal Saudi Air Force (RSAF) will eventually acquire a total of 55 aircraft by 2016.
Key Forecasts:Defence expenditure in 2015 is forecast to increase by 5.5% y-o-y from 2014, to reach 62.4USDbn.
Total armed forces is forecast to rise from 16,706,296 in 2014 to 17,008,083 in 2015.
Defence Imports of Bombs, grenades, mines, missiles and ammunition is forecast to total 826.4USDmn in 2015, this is a 3.4% y-o-y increase from 2014.
Defence imports of arms and ammunition is forecast to increase from 865.5USDmn in 2014 to 887.4USDmn in 2015.
The Saudi Arabia Defence & Security Report features Business Monitor International (BMI)'s independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.
BMI's Saudi Arabia Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Saudi defence and security industry.
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Global and Regional Political Outlooks
A strategic overview of the world's major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict or separatism and insurgencies, plus a summary of the world's 'wild card' low-probability high-impact risks.
Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into 'Strengths', 'Weaknesses', 'Opportunities' and 'Threats'.
Political Risk Assessment
Drawing on BMI's heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.
Security Risk Analysis
BMI's proprietary Security Risk Rankings provide a reliable - and country comparable - guide to conflict, terrorism and criminal risk, backed up by our analyst's latest assessment of each component. Furthermore, drawing on our country risk expertise, we assess the state's vulnerability to a serious - or prolonged - terrorist campaign.
Armed Forces Spending/Expenditure
The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.
Domestic Security Overview
The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries.
BMI Industry Forecast Scenario
Historic data series and forecasts to end-2018 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Budgets & Expenditure: Defence expenditure (local currency and US$bn); defence expenditure (% of total budget); defence expenditure (% of GDP); defence expenditure per capita, US$; defence budget (local currency and US$bn).
Employment: Employment in arms production (`000s); employment in arms production (% of labour force).
Macroeconomic: BMI's forecasts and analysis of all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Domestic Security Overview
The reports also provide a regional overview which details specific issues and flashpoints affecting , along with potential risks in the coming year.