Skip to content Skip to Search
Skip navigation

Middle East military spend shoots up after Saudi splurge

EADS Eurofighter Typhoon jet Reuters
Qatar's growing military spending has included the purchase of aircraft such as Eurofighter Typhoons
  • Middle East countries devote high percentages of GDP to military
  • Saudi Arabia was fifth-largest spender in the world in 2022
  • Oil price rises may permit increased investment in the region

A surprise hike in Saudi Arabia’s defence budget combined with higher spending by Qatar and the UAE contributed to an increase in total military spending in the Middle East in 2022, after years of contraction.

Two specialist think tanks that made this observation believe the trend is set to persist as steady oil prices support governments’ expenditure on their armed forces this year and next.

Annual military spending in the Middle East and North Africa rose 5 percent in 2022 to $203 billion, AGBI calculations suggest, based on a Stockholm International Peace Research Institute (Sipri) report published this week.

The International Institute for Strategic Studies (IISS) – a London-based think tank whose donors include defence manufacturers – gave a slightly different estimate.

Defence spending in the Middle East and North Africa, excluding United States military aid, was $207 billion in 2022, up from $173 billion in 2021, the IISS calculated. The two think tanks are therefore $4 billion apart in their calculations.

The figures are based in some cases on estimates because countries’ military budgets are opaque, says Diego Lopes da Silva, a Sipri senior researcher in military expenditure and arms production programme, adding: “It’s difficult to see where the money is spent exactly.”

Middle East countries remain among the biggest defence spenders as a percentage of GDP, despite recent budget cutbacks. The total dollar spend, however, is dwarfed by that of the US, where defence spending was $877 billion in 2022, according to Sipri.  

Soaring inflation in Iran swelled the 2022 figure and spending in real terms would have continued to contract – as it has done since 2018 – were it not for Saudi Arabia upping its budget significantly, Fenella McGerty, an IISS senior fellow for defence economics, said. Qatar and the UAE also spent more in 2022.

McGerty attributes the Gulf states’ confidence to the oil price surge following Russia’s invasion of Ukraine, which has put them on a stronger financial footing.

GCC countries ran fiscal surpluses in 2022 after seven years of deficits and are likely to do so again this year and next, according to the IISS.

“The short term outlook for defence spending in the Middle East is therefore stronger than it was two years ago,” says McGerty.

“Strategic drivers are as pressing as ever and the largest spenders in the region, Saudi Arabia and the UAE, have considerable defence-industrial ambitions, so higher government revenues may enable them to make much-needed investments in defence related R&D to bolster domestic production capabilities.”

Saudi Arabia was the fifth biggest defence spender worldwide in cash terms in 2022, having invested an estimated $75 billion last year – up 16 percent year-on-year but still less than it was a decade ago, Sipri figures show. Only the United States, China, Russia and India spent more.

IISS’s McGerty gives a lower estimate for Saudi Arabia’s 2022 military expenditure of $65.3 billion, noting the government had previously announced a budget of $45.6 billion before revealing its actual spending last December.

Strained relations between Riyadh and Washington, Saudi’s main arms supplier, may have also contributed to lower spending from 2015 to 2021, according to IISS. The decline came despite Saudi participating in Yemen’s civil war from 2015.

“Saudi military spending has been quite volatile, which makes it hard to make predictions about future expenditure,” Sipri’s da Silva said.

Elsewhere in the Gulf, Qatari annual military spending also soared last year – by 34.5 percent to $8 billion according to IISS, and by 33 percent to $15 billion as per Sipri data.

Qatar’s defence spending has increased in real terms by an average of 12 percent annually since 2011, IISS wrote, attributing the extra outgoings to the gas exporter’s heightened security concerns following a Saudi-led blockade from 2017 to 2021.

Purchases included 108 combat aircraft – F15s, Eurofighter Typhoons and Rafales – from the United States, United Kingdom and France respectively.

“Qatar’s air force will be one of the most modern and diverse in the region once all three types are in service,” IISS wrote. “However, the volume and speed of these acquisitions raises questions over Qatar’s ability to crew and maintain the aircraft.”

United Arab Emirates’ defence spending last year was $20 billion, up 6 percent year on year, the IISS estimated.

“The UAE’s armed forces are arguably the best trained and most capable of all GCC states,” its report stated.

Kuwait’s military spending fell 9 percent last year, while Bahrain and Oman were unchanged, according to Sipri.

“High and persistent inflation will challenge increases in real terms in several countries and most have competing spending priorities, so this may temper the extent of the increases enabled by the greater fiscal power in the Gulf,” says the IISS’s McGerty.

Military burden

Saudi’s 2022 military expenditure equates to 7.4 percent of GDP and was second only to Ukraine globally. Qatar (7 percent) was third and Oman (5.2 percent) was fifth, while Jordan (4.8 percent), Kuwait and Israel (both 4.5 percent) also made the top 10, according to Sipri.

“It’s really hard to have a big shift in the military burden on a year-to-year basis, even if there are positive diplomatic developments,” said da Silva.

Recent improvements include the restoration of Qatar’s diplomatic and economic relations with Saudi Arabia and the UAE, talks between Saudi and Iran, and increasing hopes for a lasting settlement in Yemen.

Yet such progress will do little to deter Gulf governments from maintaining high military spending-to-GDP ratios, da Silva said.

“For the coming year, it's very likely that the Middle East will again have some of the highest military burdens worldwide,” he added.

Sipri also revised its methodology to calculate Iran’s military spending in dollar terms. Previously, Sipri had used the official, subsidised central bank exchange rate that Iran uses to import essential goods, according to a note from London think tank Bourse & Bazaar Foundation.

When adopting the real exchange rate, which would apply to military arms and equipment, Iran’s defence spending was $6.8 billion in 2022, Sipri’s latest report shows, up from a revised $5.4 billion in 2021. Sipri previously estimated Iran’s 2021 spending at $24.6 billion.

Latest articles

Haitham Al Ghais, secretary general of Opec. The organisation has extended its voluntary output cuts, led by Russia and Saudi Arabia

Opec extends voluntary cuts to support oil market stability

Opec+ producers led by Saudi Arabia and Russia have stretched their additional voluntary crude supply cuts for another three months, as the oil bloc strives to support the stability and balance of sluggish markets. Oil prices traded flat Monday morning after a slight spike following the Opec announcement. Brent crude traded around $83.50 per barrel. […]

Aviation IT Shop, Shopping Mall, Person Dubai Airports already uses biometric technology and is preparing to launch a Smart Corridor to speed up boarding procedures airport aviation IT airports airlines investment

Aviation spends billions on IT to improve experience

The aviation sector invested billions into IT in 2023, as companies sought to improve passenger experience, according to a new industry report. Global airports increased their IT spending by 23 percent year on year to almost $11 billion last year, while airlines upped spending by 15 percent to $34 billion, according to the 2023 Air […]

Sellers at the fish market in Jizan, Saudi Arabia. The kingdom brought in regulations in 2021 to curb overfishing

Saudi Arabia and UAE back fishing subsidies ban

The UAE and Saudi Arabia were the only GCC countries to back a failed bid by the World Trade Organization (WTO) to curb subsidies that contribute to overfishing and wider fishing sector overcapacity. It had been hoped that the Agreement on Fisheries Subsidies (AFS), which, according to WTO director-general Ngozi Okonjo-Iweala, has “been on the […]

Tourists in front of the Jabal Al-Mawaqi rock art, Najran Province, Thar, Saudi Arabia

PIF and Seera fail to reach agreement on investment

Saudi travel major Seera Group Holding has terminated plans for the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, to invest in its subsidiary, Almosafer Travel and Tourism Company. The termination comes after the two companies failed to reach an agreement, Seera said in a statement to the Saudi bourse. The statement clarified that […]