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Omani military expenditure is $9 billion in 2019, and registered a CAGR of -2.39% during 2015-2019. The defense spending in the Middle East has declined over the past year, despite a string of ongoing conflicts across the region, including in Syria, Iraq, Yemen and Libya. The decline in the defense budget during the historical period is primarily due to the country's heavy reliance on oil and gas revenues to fund its expensive defense modernization programs.
However, with Brent crude supplies expected to come under strain, owing to sanctions on Iran and disruption in the production of Venezuelan and Libyan oil, oil prices are likely to touch US$90 per barrel. As a consequence, an increase in the oil prices is projected to enable Oman to earmark greater resources to its defense sector. Oman's defense expenditure is expected to grow at a CAGR of 0.56% during the forecast period to reach US$9.3 billion by 2024. As a percentage of GDP, the country's defense budget is expected to decrease from an average of 12.3% during 2015-2019 to an average of 9.9% during the forecast period.
Oman is anticipated to focus on modernizing the capability of its armed forces to keep pace with its neighbors such as the UAE, Saudi Arabia, and Bahrain. Also, an arms race in the region, which has now intensified owing to the growing turbulence in countries such as Syria and Yemen, is expected to drive the country's defense expenditure during the forecast period. The country's capital expenditure allocation, which stood at an average of 40.1% during the historical period, is projected to increase at an average of 41.3% during 2020-2024, primarily due to the country's procurement of advanced defense equipment.
Among the major procurements are multirole aircraft, missile defense systems, armored vehicles, and military rotorcraft. Oman is expected to remain as one of the biggest buyers of defense equipment globally over the coming decade. Investment into strengthening naval and air defense capabilities is expected to drive defense imports. Oman's defense imports continued to increase during 2013 and 2014, but declined drastically in 2015 owing to the paucity of new procurement deals signed during that year. However, defense imports managed to recover in 2016 and continued to increase in 2017.
During 2013-2017, aircraft accounted for the largest defense expenditure, with the UK being the largest supplier. Other significant import partners include the US, Norway, Spain, France, Singapore, the Netherlands, Australia, Turkey, Germany, Italy, Canada and Denmark. Naval vessels, missiles, air defense systems, sensors, engines, armored vehicles, and naval weapons were the other key imports during 2013-2017.