Middle East Increases Emphasis on Military Capabilities and Pushes Defence Spending Back to Growth, IHS Markit Says

Region transitioning from protecting its borders to developing capabilities needed to conduct regional operations

Friday, February 17, 2017 5:44 am EST


"We expect Saudi Arabia and the UAE in particular to begin to start to spend heavily again over the next two years."

LONDON (17 February, 2017) – Middle East defence budgets will return to growth in 2017 as the region increases its drive to acquire new military capabilities, according to new analysis released today by IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

“Defence procurement activity is starting to pick up in the Middle East following a brief dip due to the collapse in oil prices” said Craig Caffrey, principal analyst, IHS Jane’s Defence Budgets. “We expect Saudi Arabia and the UAE in particular to begin to start to spend heavily again over the next two years.”

IHS Jane’s expects 2 to 3 percent growth a year by 2018 in real terms.  Defence spending for the Middle East and North Africa region will rise to around $180 billion by 2020.

Saudi Arabia will remain by far the largest spender on defence in the region for the foreseeable future. In dollar terms, Saudi Arabia is now the fourth largest spender on defence globally. The depreciation of the pound has seen the UK drop to fifth.

“The Saudi defence budget will return to growth in 2017 and we’re likely to see that trend continue going forward as the country seeks to maintain its position as the region’s preeminent military power,” Caffrey said.

Shifting defence patterns – operations beyond borders

“Traditionally, military capabilities in the region have been focused on territorial defence,” said Reed Foster, analyst at IHS Jane’s Military Capabilities. “Now we are seeing the acquisition of strategic transport and tanker aircraft, intelligence gathering platforms and precision guided munitions and targeting pods. This is an attempt to build the kind of capabilities required to conduct operations beyond their borders.”

“In the short term, I think we’ll continue to see further investment in combat aircraft and related systems and likely more funding for supporting capabilities like transports and C4ISR platforms,” Caffrey said. “Longer term we’re likely to see an increase in investment in naval systems.”

Regional threats and US withdrawal

“Other than low oil prices and the threat from the Islamic State, the re-emergence of Iran following years of sanctions is an issue that could impact defence spending in the region,” Caffrey said. “We’ve seen significant investment in missile defence systems over the last five years, aimed directly at countering the perceived threat from Iran. But, if we start to see a more proactive, emboldened Iran over the coming years with a growing economy and an expanding defence budget then that’s likely to cause additional concern. It will likely prompt reciprocal increases in defence spending elsewhere in the region.”

“Many of the medium-term defence acquisitions that we’re now seeing in the Gulf are in light of the potential removal of most conventional military sanctions against Iran in late 2020 under the terms of the current nuclear deal,” Foster said. “The uncertainty of a more capable Iran coupled with questions regarding US long-term engagement in the region have induced many Gulf states to ‘green light’ a number of strategic procurement programmes.”

Data: Top 10 Middle East and North Africa defence budgets (in billions USD)




Saudi Arabia






























Data notes:

Intelligence cut-off date: 16 February 2017. All values in 2017 constant USD.

Meet IHS Jane’s at IDEX

Meet us at IDEX 2017 (stand C12-008) from 19 to 23 February in Abu Dhabi. IHS Jane’s is the official thought leadership partner of the IDEX Defence Conference.

Tate Nurkin, head of the Jane’s Strategic Assessment and Futures Studies (SAFS) Centre advised the IDEX organising committee on disruptive innovation in defence and security. Mr. Nurkin specialises in designing and delivering scenario planning exercises, horizon-scanning analyses, “blue” and “red” team panels, net assessments and open source intelligence trainings for public sector and defense industry clients.

Read an abstract of the three alternative visions of the future of global defence and other reports by Mr. Nurkin.

About the IHS Jane’s Annual Defence Budgets Report

Learn more about IHS Jane's Defence Budgets or get in touch for more information on this product.

The IHS Jane’s Annual Defence Budgets Report is the world’s most comprehensive, forward-looking study of government’s defence budgets. Tracking 99 percent of the global defence expenditure from 105 of the world’s largest defence budgets, data is compiled from IHS Jane’s Defence Budgets online solution platform. It includes five-year forecasts, historical data, budget charting, trend evaluation and in-depth analysis by country.


About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2017 IHS Markit Ltd. All rights reserved.


All Industries
IHS Media Relations, +1 303 305 8021
Technology; Aerospace, Defense & Security
SungHa Park, +82 31 8039 8771