Israel has demonstrated exceptional resilience in safeguarding its nation and promoting regional stability, in the wake of persistent challenges posed by Hamas, Hezbollah and ongoing Iranian hostilities. Indicating its proactive response against evolving security challenges, Israel’s defence acquisition budget experienced a significant compound annual growth rate (CAGR) of 17.1%, rising from $4.7 billion in 2019 to $8.8 billion in 2023, according to GlobalData, a data and analytics company.
GlobalData’s latest report, “Israel’s Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28,” reveals that Israel’s budget is anticipated to increase from $24.4 billion in 2023 to $27.5 billion in 2028. Its defense acquisition budget is estimated to increase to $10.2 billion in 2028.
Akash Pratim Debbarma, Aerospace & Defense Analyst at GlobalData, comments: “Recognising the critical importance of modernising its defense capabilities, the country is embarking on a series of strategic procurement programs aimed at upgrading its current inventory. These initiatives underscore the country’s proactive approach to maintaining its qualitative military edge over potential adversaries.”
The recent approval by the US government for the sale of 25 F-35 Joint Strike Fighter aircraft to Israel marks a significant development in the country’s defence capabilities. Valued at up to $15.2 billion, this procurement decision reflects Israel’s commitment to acquiring advanced military technology to strengthen its air superiority.
Debbarma adds: “Israel’s focus on investing in missile and missile defence systems, and the military fixed-wing aircraft sector further demonstrates its commitment to strengthening its defense capabilities. These strategic investments not only showcase its determination to address current challenges but also position it as an attractive market for defense technologies, fostering innovation and collaboration in the sector.”
Israel’s defence procurement efforts extend beyond acquisitions of foreign military platforms, as demonstrated by its ongoing indigenous procurement programs with Israel Aerospace Industries Ltd and Elbit Systems. Notable programs such as the Long-Range Artillery Weapon System (LORA), Rampage conventional land attack missiles, Predator Hawk conventional land attack missiles, and Arrow 4 platform-based missile defence systems highlight its commitment to innovation and self-reliance in addressing its unique security challenges. These indigenous procurement programs not only strengthen Israel’s defence capabilities but also position the country as a leading player in the global defence industry.
Debbarma concludes: “The evolving military capabilities of Arab states in the region pose a significant challenge to Israel’s ability to maintain its qualitative military edge. With its perceived rival Arab countries enhancing their own defence capabilities, Israel must persistently strive to retain its technological lead and deterrence ability.”
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This is good to see, Isreal has been doing a lot of modernising over the last several years after taking abit of a procurement holiday over the 2005-2015 period.
As you can see by those figures in the 2019 year with procurement funds at just 4.7 billion it mean’t that most of those funds were actually defense aid from the United States as that aid has to be spent on equipment purchases from the United States contractors (is my understanding). Now they are spending alot more of their own money as a percentage of those figures.
Another possible and very likely explanation for this large increase is because of Iran and the Biden administration trying to renegotiate the Nuclear deal, which Israel is heavily opposed too. Also in recent times Arabs states has normalised relations with Iran which Israel may feel could lead to a return to the 1960s and 70s when it was heavily isolated in the region.