Saudi Arabia to spend more on defense than any other sector in 2016

Saudi Arabia has ramped up its defense and security expenditures for next year, reaching about 25 percent of the new fiscal budget.

The kingdom said it would spend SAR 213.4 billion out of its SAR 840 billion budget for military and security— the highest allocation in next year’s budget— amid regional turmoil and the Saudi-led war in Yemen.

Military spending in 2015 increased by SAR 20 billion, the kingdom’s economy and planning minister told reporters on Monday, according to Reuters.

"The budget intends only to slow the growth in recurring expenditures going forward,” Bank of America-Merrill Lynch said in its latest report on Saudi Arabia. “On-budget defense spending is a risk item in this regard, as the $5.3 billion disclosed increased military and security projects over 2015 amount to a $15 million per day cost."

Saudi Arabia’s defense budget in 2015 ranked the highest in the Middle East, according to an annual report by IHS Jane’s Defence Budgets.

Earlier this month, the kingdom set up what it has called an Islamic military coalition made up of several predominantly Muslim countries to fight religious extremists and terrorists in the region.