Global military spending hits $2.9 trillion as Europe and Asia re-arm amid heightened tensions

Source: NATO

Global military expenditure climbed to a staggering $2.887 billion in 2025, marking the eleventh consecutive year of growth and pushing the global military burden to its highest level since 2009.

According to new data released on April 27 by the Stockholm International Peace Research Institute (SIPRI), world spending rose by 2.9 per cent in real terms.

While the United States saw a temporary decline in its annual budget, massive spending surges across Europe and Asia fuelled a broader trend of rapid rearmament in response to persistent geopolitical upheaval and regional wars.

The United States, China, and Russia remained the world's dominant military powers, accounting for 51 per cent of all global defence spending.

Outside of the U.S., total global expenditures actually grew by a robust 9.2 per cent.

Researchers at SIPRI suggest that this upward trajectory is unlikely to slow down, as many nations are now locked into long-term military modernization targets and respond to a world defined by deep uncertainty and high-stakes crises.

Europe emerged as the primary driver of growth in 2025, with spending jumping 14 per cent to reach $864 billion.

This surge was characterized by the ongoing war in Ukraine and a dramatic shift in NATO member policies.

Germany led the pack with a 24 per cent increase, pushing its military budget to $114 billion and exceeding the 2.0 per cent GDP threshold for the first time since the reunification era.

Russia’s spending rose to $190 billion, while Ukraine, now the seventh-largest spender globally, devoted 40 per cent of its GDP to defense.

Analysts noted that European NATO members are modernizing at their fastest pace since 1953, driven by a desire for self-reliance and mounting pressure from the United States to increase burden-sharing.

In contrast, U.S. military spending fell by 7.5 per cent to $954 billion, largely because no new military aid packages for Ukraine were approved during the year.

However, this dip appears to be a statistical outlier rather than a change in strategy.

The U.S. continues to pivot toward the Indo-Pacific and nuclear modernization to deter China, and projections suggest the American budget could surpass $1.5 trillion by 2027 under new budget proposals.

Asia and Oceania recorded their fastest spending growth since 2009, with a total expenditure of $681 billion.

China’s military budget rose for the 31st straight year, reaching $336 billion as Beijing continues its modernization drive.

Regional neighbours responded in kind; Japan’s spending reached its highest share of GDP since 1958, and Taiwan saw its largest annual increase since 1988 amid rising tensions in the Taiwan Strait.

Experts point out that U.S. allies in the region are spending more not just because of local threats, but also due to growing uncertainty regarding the consistency of American security guarantees.

While the Middle East remained relatively stable with only a 0.1 per cent increase, other parts of the world saw sharp spikes due to localized conflicts.

Nigeria’s military spending jumped 55 per cent to combat internal insurgencies, and Guyana increased its budget by 16 per cent as territorial disputes with Venezuela escalated.

India also maintained its position as a top-five spender, increasing its budget by 8.9 per cent to $92.1 billion as the global arms race shows no signs of losing momentum entering 2026. 

Source: SIPRI