Economy

Saudi Arabia world’s fifth biggest arms buyer in 2023

April 23, 2024, 1:23 AM

Saudi defence spending — Members of Saudi security forces take part in a military parade in Mecca. The kingdom spent 7% of its GDP on defence in 2023

Spending reached $76bn
4% increase on 2022
Middle East military spend up 9%

Saudi Arabia remains the world’s fifth largest arms buyer, according to the Stockholm International Peace Research Institute.

The think tank’s latest report said that Saudi Arabia spent $76 billion on arms in 2023, a 4 percent increase on the previous year, making it the biggest spender after the US, China, Russia and India.

The kingdom’s spending was equivalent to just over 7 percent of its GDP, the highest proportion of the top five.

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Among the 10 largest spenders in 2023, the only country that spent a larger share of its GDP on defence was Ukraine, at 37 percent.

The increased spending followed a period of rising oil prices in 2022, with the world emerging from the Covid pandemic and the start of the war in Ukraine.

Saudi GDP rose 8.7 percent that year, but fell 0.8 percent in 2023 after Opec+ oil production cuts.

The country now faces three years of budget deficits, which could limit future military spending. It has been trying to build up its own arms industry to reduce costs.

Riyadh has pursued rapprochement with Iran, making a China-brokered deal in March to resume diplomatic ties. The Saudi government is also in talks to normalise relations with the rebel Houthi movement in Yemen after it stopped air operations in 2022 under a UN-brokered truce.

Saudi Arabia says it wants to prioritise its massive economic restructuring, which centres on giga-projects that could become targets if relations nosedive with neighbours.

Saudi Arabia is trying to build up its own arms industry to reduce spending on weapons imports

The report also revealed that Middle East military spending has risen the most in the world. Estimated military expenditure in the Middle East had increased by 9 percent to $200 billion in 2023, it said, the highest annual growth rate in the region for a decade.

Israel was the second largest military spender in the region after Saudi Arabia. Its expenditure increased by 24 percent to reach $27.5 billion in 2023.

The institute put this down to the conflict between Israel and Hamas that began in October. Monthly spending rose from $1.8 billion before the October 7 attack in southern Israel to $4.7 billion in December 2023.

Iran’s military spending rose only 0.6 percent to $10.3 billion, but the institute’s report said the elite Islamic Revolutionary Guard Corps’ share of this sum rose from 27 percent of the total in 2019 to 37 percent in 2023.

“The large increase in military spending in the Middle East in 2023 reflected the rapidly shifting situation in the region from the warming of diplomatic relations between Israel and several Arab countries in recent years to the outbreak of a major war in Gaza and fears of a region-wide conflict,” said senior researcher Diego Lopes da Silva.

Total global military expenditure reached $2.4 trillion in 2023, an increase of 6.8 percent in real terms from 2022 and the steepest year-on-year increase since 2009.