Israel Defence and Security Report 2015
BMI View: Israel possesses one of the largest defence sectors globally, and local manufacturers export arange of items - particularly in the electronics segment - to a variety of countries across the world.
Additionally, a number of these domestic manufacturers take part in international product developmentpartnerships. Domestic demand for defence equipment remains strong, driven primarily by security threatsfrom Hamas and Hizbullah, as well as the risk of conflict with Iran. Despite this, however, Israeli defenceexpenditure growth has slowed in the recent past due to budget constraints.
As of late May 2014 it was reported that Israel's defence budget funding was suffering severe problems,with the country's defence ministry ordering the suspension of a number of research and developmentprojects and warning that other programmes could face major reductions or cancellations as a result offunding reductions. The Ministry of Defence (MoD) has been unable to agree upon a supplemental fundingpackage with the country's Finance Ministry for 2014. The result of this is that a number of programmeswere frozen pending a review of the non-fixed expenses of the MoD. The suspension came following aprocurement slowdown which has been in place since January 2014, which has reduced by half the numberof new systems being procured by the Israeli MoD annually.
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