Saudi Arabia’s budget may have disheartened international contractors and consultants as they prepare to feel the crunch of low oil prices and reduced spending in 2016. But the ramping up of defence spending will be positive news for foreign arms and weapons manufacturers as the kingdom now boasts the fifth-largest defence budget in the world

Saudi Arabia has said it will spend SR213bn ($57bn) on military and security services in 2016. Although the 2016 budget saw major cuts across almost all sectors, defence has prevailed as a major priority for Saudi Arabia amid a military offensive in Yemen and diplomatic tensions with Iran.

Saudi Arabia has led a rhetorical war with Tehran over the past few years with many Shia groups deemed to be a direct threat to the kingdom from Tehran. It is therefore no surprise that Riyadh is committed to its plans to increase defence spending to $60bn by 2020.

The kingdom’s defence spending is understood to have been growing by an average of 19 per cent annually since 2001 and with regional conflicts showing no sign of slowing down Saudi Arabia is set to maintain this trajectory.

The increased defence spending is seen by some analysts as Saudi Arabia’s continued efforts to position itself as a regional leader. The call for what it has dubbed as an Islamic military coalition illustrates these ambitions led by King Salman Abdulaziz al-Saud who has embarked on a hawkish military policy since January this year.

Domestically, the government will point at a number of bomb attacks in the eastern province and as well as the war in Yemen to justify its increased defence spending at a time when cuts are being made across a number of other sectors and fuel subsidies are being lifted.

Thus far it is unclear the extent to which Saudi Arabia is willing and even capable of embarking on further military operations beyond airstrikes in Yemen. Nonetheless the new budget has reiterated the kingdom’s military ambitions and has consolidated its position amongst the world’s leading defence spenders.