Global defence expenditure continued its upward trajectory in 2025, rising by 2.9% to reach a record $2.89 trillion, according to a new report from the Stockholm International Peace Research Institute.
The increase marks the 11th consecutive year of growth in worldwide military spending.
The report highlights that military spending has now climbed to 2.5% of global GDP, the highest level recorded since 2009, reflecting intensified security concerns and prolonged conflicts.
U.S. Spending Declines After Ukraine Aid Freeze
The United States recorded a notable 7.5% drop in defence spending, falling to $954 billion in 2025. SIPRI attributes this decline primarily to the suspension of new financial military assistance for Ukraine under President Donald Trump’s administration.
Despite the fall, the U.S., along with China and Russia, still dominated global defence budgets. Together, the three countries accounted for $1.48 trillion, representing just over half of total worldwide military spending.
SIPRI cautioned that the decline in U.S. expenditure is likely temporary, noting that Congress has already approved a significantly larger defence allocation for future years, potentially exceeding $1 trillion in 2026 and rising further thereafter.
Europe Drives Global Increase
One of the most significant drivers of global growth was Europe, where military spending surged by 14% to $864 billion. The increase reflects continued fallout from the Russia–Ukraine war and heightened defence commitments among NATO members.
Also read: US Defense Budget Explained: What a $1.5 Trillion Military Spending Plan Means
Spending across Central and Western Europe recorded its fastest annual growth since the end of the Cold War, as countries expanded defence budgets in response to regional instability.
Both Russia and Ukraine continued to increase their military expenditure amid the ongoing conflict entering its fourth year.
Regional Shifts in Defence Budgets
In the Middle East, defence spending showed mixed trends. Israel’s military expenditure fell by 4.9% to $48.3 billion, as the intensity of the Gaza conflict eased during the year.
Iran also reduced its defence budget for a second consecutive year, down 5.6% to $7.4 billion, reflecting broader economic pressures.
Outlook: Continued Growth Expected
SIPRI analysts warn that global military spending is likely to keep rising through 2026 and beyond, driven by ongoing conflicts, strategic rivalries, and long-term defence modernization plans.
“With multiple active crises and increasing national defence targets, upward pressure on military budgets is expected to persist,” the report stated.
