The Saudi Arabian defence industry is estimated to have the fourth largest defence budget in the world, behind the US, China, and Russia.
Valued at US$52.9 billion in 2013, the country's defence expenditure is placed seventh among the top 10 military spenders, and is expected to increase at a compound annual growth rate (CAGR) of 7.92%, to reach US$77.3 billion by 2018.
In the wake of security threats, regional rivalry and the protection of its critical security infrastructure, the country's defence industry is projected to grow considerably through to 2018.
The Saudi armed forces consists of the Saudi Arabian Army, the Royal Saudi Air Force, the Royal Saudi Navy, the Royal Saudi Air Defence, the Saudi Arabian National Guard (SANG), and paramilitary forces, totalling over 200,000 active-duty personnel.
Spending on defence and security has increased significantly since the mid-'90s. Saudi Arabia's modern high-technology arsenal makes it among the world's most densely armed nations, with its military equipment being supplied primarily by the US, France and Britain
The lack of a well-established defence industry forces Saudi Arabia to rely on imports from foreign companies. During 2008-2012, the country's defence imports increased significantly, peaking in 2011. Aircraft dominated the imports during this period, with the US and the UK being the preferred sources.
Major contracts signed during 2011-2012 will drive the country's imports through to 2018, which is expected to see a similar trend. Aircraft accounted for 51.8% of total defence equipment imports by the country during 2008-2012 and Saudi Arabia is expected to follow the same trend over the next five years.
The vast majority of Saudi Arabia's military equipment is imported from European and North American suppliers. However, the Al-Fahd Infantry fighting vehicle and the Al-Faris 8-400 armoured personnel carrier, used by Saudi land forces, were manufactured by the Abdallah Al Faris Company for Heavy Industries, based in Dammam. Also, Ashibl 1 and Ashibl 2 are Saudi-made armoured vehicles used by the Royal Saudi Land Forces and the kingdom's most elite special operations units of Battalion 85.
Iran's advancement in long-range missile technology has forced Saudi Arabia to develop its own advanced air defense capabilities and demand is expected to particularly increase in the missile defense category. The demand for anti-ballistic missile systems is expected to be high over the coming years, with the nation's previous acquisitions of anti-ballistic missile systems aimed at countering Iran's Shahab system.
The Saudi Arabian government's hopes of strengthening its defence infrastructure in order to emerge as the most powerful nation in the Middle East have been supported by many years of high oil prices and strong economic growth.
For more information on the Saudi Arabian defence industry, see the latest research: Saudi Arabian Defence Industry
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