Defense Budget Forecast
The UAE's defense expenditure recorded an overall contraction of 0.7% between 2018 and 2022 and amounted to $22.5 billion in 2022. Historically, the UAE's involvement in Yemen's civil war, to suppress insurgent activities and terrorism in support of its ally Saudi Arabia, drove defense expenditure during 2018–22. Over the forecast period, the UAE's expenditure is expected to reach $28.6 billion in 2027, growing at a CAGR of 4.8%. Despite the withdrawal of the UAE's troops from Yemen in 2019, there was a surge in defense spending that year, and the country continues to wield immense influence over the anti-Houthi militia.
The government is expected to increase its expenditure on armed forces training and military hardware procurement towards the end of the forecast period to counter the influence of Iran in the Middle East.
Drivers of Defense Expenditure
As per GlobalData’s UAE Defense Market 2022-2027 report, drivers of defense expenditure include the strengthening the capabilities of the Emirati Armed Forces, territorial disputes with Iran, and to counter attacks on UAE's strategic assets by Iran and others especially after the endorsement of the Abraham Accords. The UAE's acquisition budget in 2022 is $6.3 billion; which is significant owing to the need to finance the probable procurement of a fleet of Rafale fighter aircraft.
Several programs have been undertaken to help strengthen the UAE’s military capabilities. From the modernization of ISTAR capabilities to the expansion of its air lift capabilities and even the naval fleet expansion. These can be understood from the evolving security environment the UAE finds itself in.
Another focus has been its stockpiling of precision guided munitions (PGM) which could suggest an increasing emphasis on furthering its ground attack capabilities.
Access the report here.
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