In 2012, the Israeli defense market valued US$13.10 billion, which represented the third largest military expenditure in the Middle East. During the review period (2008-2012), the Israeli defense expenditure declined at a CAGR of -0.94% but is expected to record growth at a CAGR of 2.97% during the forecast period (2013-2017). The growth can be partially attributed to the US$15.5 billion of military aid from the US scheduled between 2013 and 2017; moreover, the continued security threats from Iran, Syria, and other neighboring Arab countries is forecast to result in Israel spending US$71.3 billion on defense during the forecast period.
In 2012, Israeli defense expenditure as a percentage of its gross domestic product (GDP) was 4.1%, but this is expected to decline to an average of 3.9% during the forecast period due to the refusal of many countries in the Middle East to accept Israel as an independent state and the subsequent threat posed to the security of the nation. Consequently, Israel is expected to focus its spending on the procurement of fighter aircraft, missiles, border security equipment, and communication systems.
Israel has built a self-reliant defense industry in which 70% of the nation’s defense needs are met by domestic procurement. Despite this, the Israeli government imported fighter aircraft, engines, missiles, air defense systems, and artillery during 2007–2011. The US accounted for over 92% of Israeli defense imports during 2007–2011, whilst Turkey emerged as the greatest consumer of Israeli defense goods with a 23% share of overall exports of Israel. During 2007–2011, the three key Israeli arms export categories were sensors, armored vehicles, and missiles.
Read more on ASDReports
Source: ASDReports - Market Research
Date: Feb 14, 2013