Global Defence Budgets Soar to $2.9 Trillion as World Grapples with Rising Tensions

Worldwide military expenditure reached nearly $2.9 trillion in 2025, extending an unbroken streak of growth to 11 consecutive years as escalating geopolitical tensions and rearmament initiatives drove defence spending upward, according to researchers reporting Monday.

The three dominant military spenders—the United States, China, and Russia—collectively accounted for $1.48 trillion, representing just over half of all global defence expenditure. Overall spending increased by 2.9 percent compared with 2024, despite a decline in US spending, the planet's largest defence budget, according to analysis from the Stockholm International Peace Research Institute (SIPRI).

Shifting Global Landscape

Lorenzo Scarazzato, a researcher at SIPRI, explained to AFP that reductions in American military spending were substantially offset by heightened defence investments across Europe and Asia. He characterised 2025 as "another year of wars and increased tensions."

The global "military burden"—the proportion of worldwide economic output allocated to defence—reached its highest level since 2009. "Everything points to a world that feels less secure and is spending on its military to compensate for the global landscape," Scarazzato observed.

United States and Ukraine Aid

The United States deployed $954 billion in military spending, a 7.5 percent decrease from 2024. This decline stemmed largely from the absence of newly authorised military assistance packages for Ukraine during the year, after Washington had committed $127 billion to Kyiv throughout the preceding three years.

However, this downward trend appears temporary. The US Congress has greenlit defence spending exceeding $1 trillion for 2026, with projections potentially reaching $1.5 trillion in 2027 should President Donald Trump's budget proposal gain approval.

Europe's Defence Build-Up

Europe emerged as the primary driver of the global spending surge, with the region—encompassing Russia and Ukraine—increasing outlays by 14 percent to $864 billion. Scarazzato identified two principal factors: "One is the ongoing war in Ukraine, and the other is the decreased US engagement with Europe," adding that Washington is "pushing for Europe to take more care of its own defence."

Germany, the fourth-largest military spender globally, elevated its defence budget by 24 percent to $114 billion. Spain experienced a more dramatic expansion, recording a 50 percent jump to $40.2 billion, enabling military spending to exceed two percent of GDP for the first time since 1994.

The Ukraine Conflict's Toll

The persistent conflict in Ukraine prompted both warring nations to substantially increase military expenditure, each recording the highest proportion of government budgets dedicated to defence.

• Russia: Military spending rose 5.9 percent to $190 billion, constituting 7.5 percent of GDP
• Ukraine: Defence spending surged 20 percent to $84.1 billion—an extraordinary 40 percent of national GDP

Middle East Stagnation

Despite ongoing tensions throughout the Middle East, regional military spending increased marginally by just 0.1 percent, reaching $218 billion. Most nations in the region augmented their defence allocations, yet both Israel and Iran recorded declines.

Iran's defence budget contracted 5.6 percent to $7.4 billion, primarily attributable to annual inflation exceeding 42 percent; in nominal terms, spending actually expanded. Israel's 4.9 percent reduction to $48.3 billion reflected diminished intensity in the Gaza conflict following a January 2025 ceasefire agreement, researchers noted, though Israeli military spending remained 97 percent higher than 2022 levels.

Asia's Rapid Expansion

Asia and Oceania witnessed the region's largest annual spending increase since 2009, with expenditure climbing 8.5 percent to $681 billion.

China remained the region's "major player," according to Scarazzato, with three decades of consecutive annual spending increases culminating in an estimated $336 billion allocated in 2025. Yet equally significant has been the military response from neighbouring nations perceiving heightened security threats. Japan raised military expenditure by 9.7 percent to $62.2 billion, representing 1.4 percent of GDP—its highest proportion since 1958. Taiwan increased its defence budget by 14 percent to $18.2 billion.

(FRANCE 24 with AFP)