Saudi Arabia to raise military spending 6 pct -budget

DUBAI, Dec 22 (Reuters) - Saudi Arabia, at war in Yemen and competing for regional influence with arch-rival Iran, projects a 6.7 percent rise in defence spending in 2017 to 191 billion riyals ($50.8 billion), according to official budget figures released on Thursday.

The kingdom, one of the world’s biggest military spenders, forecasts a decline in Security and Regional Administration, a separate spending category that is military-related, to 96.7 billion riyals from 102.3 billion.

Military spending was originally projected at 179 billion riyals in 2016 but actual military spending has been around 205.1 billion. Security and Regional Administration spending will be 100.6 billion in 2016, according to the budget’s preliminary estimates.

A Saudi-led Arab coalition intervened militarily in Yemen in March 2015 in support of President Abd-Rabbu Mansour Hadi, a Saudi ally, and to push back Iran’s influence in the region.

The first collective Gulf Arab effort at exercising armed ‘hard power’ without direct military U.S. backing, the war has gone on for 21 months, eating up ammunition and spare parts and requiring extensive logistical support.

Riyadh is expected to continue buying billions of dollars worth of weapons, mainly from Western suppliers such as the United States, Britain and France, for its land, sea and air forces in coming years.

Defence Minister and Deputy Crown Prince Mohammed bin Salman, pursuing wide economic reforms to reduce reliance on oil, said in an interview in April that military-related spending was a “problem”, suggesting some was extravagant.

The budget statement said military spending would cover equipment, installations, weaponry, ammunition, and facilities to boost military, institution and housing capabilities.

The security budget included money for the establishment of naval bases for border guards, it said. (Reporting by William Maclean; Editing by Catherine Evans)