$2.63 Trillion — The World Enters a New Era of Military Rearmament
The world is rearming at a pace not seen since the Cold War. According to the IISS Military Balance 2026, global defence expenditure reached $2.63 trillion in 2025, up from $2.48 trillion a year earlier — a 2.5% real-terms increase. The preceding year was even more dramatic: SIPRI recorded a 9.4% surge in 2024 to $2.718 trillion — the steepest year-on-year rise since at least the end of the Cold War, with military spending increasing in all five world regions simultaneously for the first time in decades.
The United States remains the world's undisputed top military spender, with a 2025 defence budget of approximately $980 billion — more than the next 10 largest spenders combined and accounting for roughly 37% of total global military expenditure. China holds second place with an estimated $314 billion, representing three decades of consecutive spending growth. Germany made history in 2024 by overtaking the UK to become Western Europe's largest defence spender for the first time since reunification, while Russia's wartime budget surged 38% in 2024 to reach $149 billion, doubling its 2015 level. Against this backdrop, NATO allies made a transformational commitment at the 2025 Hague Summit: every member must reach 5% of GDP on core defence requirements by 2035 — more than doubling the previous 2% benchmark.
This report draws on the latest data from SIPRI's Trends in World Military Expenditure 2024 fact sheet, the IISS Military Balance 2026, NATO's official expenditure data, and supplementary research from the UK Ministry of Defence's International Defence Expenditure Bulletin 2025 to provide the most comprehensive and current country-by-country ranking available.
| # | Country | Spending (USD Billion) | % of GDP | YoY Change |
|---|---|---|---|---|
| 1 | 🇺🇸 United States | $980B (2025 est.) | ~3.4% | +5% |
| 2 | 🇨🇳 China | $314B (2024) | ~1.7% | +7.0% |
| 3 | 🇷🇺 Russia | $161B (2025) | ~6.7% | +3% |
| 4 | 🇩🇪 Germany | $109B (2025 est.) | ~2.1% | +18% |
| 5 | 🇮🇳 India | $86B (2024) | ~2.4% | +4.2% |
| 6 | 🇬🇧 United Kingdom | $84.2B (2024) | 2.33% | +2.3% |
| 7 | 🇸🇦 Saudi Arabia | $78B (2025) | ~5.5% | +5% |
| 8 | 🇺🇦 Ukraine | ~$65B (2025) | ~26%+ | Rising |
| 9 | 🇫🇷 France | $61B (2025) | ~2.1% | +5% |
| 10 | 🇯🇵 Japan | $55B (2025) | ~1.3% | +12% |
| 11 | 🇰🇷 South Korea | $50B (2025) | ~2.8% | +4% |
| 12 | 🇵🇱 Poland | $38B (2024) | 4.2% | +31% |
| 13 | 🇮🇱 Israel | $37B (2025) | ~8.3% | +High |
| 14 | 🇦🇺 Australia | $34B (2025) | ~2.0% | +8% |
| 15 | 🇨🇦 Canada | ~$28B (2025) | ~1.4% | +Rising |
Sources: SIPRI 2025, IISS Military Balance 2026, Visual Capitalist 2025. Some 2025 figures are estimates pending final official releases.
The United States — $980 Billion and Counting
No country comes close to the United States in absolute military expenditure. The US defence budget for 2025 stands at approximately $980 billion — a figure that exceeds Switzerland's entire GDP and dwarfs the spending of the next ten largest military powers combined. According to Visual Capitalist's NATO spending analysis, the US accounts for roughly 62% of NATO's total defence budget and approximately 37% of all global military expenditure. The US military budget encompasses Department of Defense regular activities, war spending, the nuclear weapons program administered by the Department of Energy, international military assistance, and broader Pentagon-related spending.
The 2026 defense budget approved by Congress reached $901 billion, and President Trump has proposed a record $1.5 trillion military budget for 2027 — representing roughly a 50% increase above current levels aimed at accelerating modernisation, expanding naval capacity, and reinforcing deterrence against China in the Indo-Pacific. In inflation-adjusted 2025 dollars, US defence spending is now more than $400 billion higher than in the late 1990s, with the long-term trajectory firmly upward across administrations of both parties.
Trump's $1.5 Trillion 2027 Budget — A 50% Jump
President Trump's proposed $1.5 trillion military budget for fiscal year 2027 would represent the largest single-year defence appropriation in US history in nominal terms. The proposal prioritises naval expansion, missile defence, hypersonic weapons development, and next-generation air combat systems. It also reflects intensifying US-China strategic competition, with the Pentagon explicitly identifying China as the "pacing threat" driving procurement priorities across all service branches. Congress will determine the final figure, but even a partial approval would accelerate the global arms build-up significantly.
China — $314 Billion and Three Decades of Consecutive Growth
China is the world's second-largest military spender and has recorded consecutive spending increases for three full decades. SIPRI's 2025 press release confirmed China's 2024 military expenditure reached an estimated $314 billion — a 7.0% increase that maintained its established pattern of above-GDP-growth defence investment. China's official defence budget for 2025 included a further 7.2% hike, keeping pace with economic growth while expanding procurement of advanced naval vessels, hypersonic missile systems, stealth aircraft, and space-based military capabilities.
Beijing's share of regional Asia-Pacific defence spending has grown from 39% in 2017 to nearly 44% in 2025, according to IISS data. Despite this massive absolute figure, China's military spending represents only around 1.7% of GDP — well below the US ratio — suggesting significant fiscal headroom for further increases. Independent analysts widely believe China's actual military-related expenditure, including paramilitary forces, defence research, and nuclear weapons programs, substantially exceeds official figures. China accounts for roughly 12% of global military expenditure and is universally identified as the primary strategic driver of US, Japanese, Australian, and South Korean defence investment growth.
Russia at $161 Billion — Europe Hits Record Spending Levels
Russia's official defence budget reached $161.2 billion in 2025, a 3% increase over 2024, according to Stars & Stripes reporting on the IISS Military Balance 2026. SIPRI had estimated Russia's 2024 military expenditure at $149 billion — a 38% year-on-year surge and double the 2015 level — reflecting the full-scale mobilisation for the Ukraine war, which entered its fourth year with no resolution in sight. Russia now dedicates an estimated 6.7% of GDP to military spending — the highest proportion among major economies and nearly double the next-highest NATO member.
The European response has been transformational. European military spending rose 12.6% in 2025, according to the IISS, following a 17% surge in 2024. Germany has been the main driver, with spending up 18% in 2025 — a remarkable reversal for a country long criticised as NATO's most prominent defence budget laggard. Other major European movers include Denmark, Finland, Norway, and Sweden, whose combined spending reached $53.7 billion in 2025 — more than double their 2020 levels. For the first time since the Cold War, European allies collectively exceeded East Asia as the second-highest-spending region. The landmark 2025 NATO Hague Summit sealed the transformation: all 32 members committed to reaching 5% of GDP by 2035, up from the 2% benchmark that itself had only just been universally met for the first time.
Key Country Profiles — The Top Spenders in Detail
Over 100 countries around the world raised their military spending in 2024. As governments increasingly prioritise military security, often at the expense of other budget areas, the economic and social trade-offs could have significant effects on societies for years to come.
— Xiao Liang, Researcher, SIPRI Military Expenditure and Arms Production Programme, April 2025All Five World Regions Increased Spending — A Historic First
The 2024 SIPRI data marked a watershed moment: all five of the world's geographical regions increased military expenditure simultaneously for the second consecutive year — an unprecedented global pattern that reflects the breadth of geopolitical tension driving rearmament. Europe and the Middle East recorded the steepest absolute increases, while Asia-Pacific sustained its long-running upward trajectory. Even regions historically less engaged in large-scale military investment — Sub-Saharan Africa and Latin America — saw spending increases driven by domestic security challenges and regional instability.
Military Spending as a Share of GDP — Who Bears the Greatest Burden?
While absolute spending rankings are dominated by wealthy large economies, GDP-share rankings reveal which nations are making the greatest proportional commitment to military expenditure relative to their economic size. This metric is particularly significant for NATO burden-sharing debates and for understanding the true fiscal strain of defence investment. According to the UK Ministry of Defence's International Defence Expenditure Bulletin 2025, Ukraine's military spending as a percentage of GDP now exceeds any other nation in measured data — at an estimated 26%+ of GDP — reflecting a total-war economy orientation that is structurally unsustainable without sustained allied support.
| Country | % of GDP | Context |
|---|---|---|
| 🇺🇦 Ukraine | ~26%+ | Wartime economy — highest measured globally |
| 🇷🇺 Russia | ~6.7% | Full wartime mobilisation level |
| 🇮🇱 Israel | ~8.3% | Multi-front conflict and expanded procurement |
| 🇸🇦 Saudi Arabia | ~5.5% | Regional tensions drive procurement expansion |
| 🇵🇱 Poland | 4.48% | NATO's highest GDP share among established members |
| 🇱🇹 Lithuania | ~4.0% | Eastern flank security imperatives |
| 🇱🇻 Latvia | ~3.73% | Targets 5% as existential deterrence |
| 🇺🇸 United States | ~3.4% | Structural superpower commitment |
| 🇬🇷 Greece | ~2.9% | Bilateral tensions with Turkey sustain high GDP share |
| 🇬🇧 United Kingdom | 2.33% | Met 2% every year since 2006; targeting 2.5% |
| 🇫🇷 France | ~2.1% | European strategic autonomy driver; targeting 3.5% |
| 🇩🇪 Germany | ~2.1% | First year meeting 2% target; €100B special fund |
Six Forces Reshaping Global Military Spending in 2026
Russia's full-scale invasion of Ukraine in February 2022 is the single most significant driver of the European and global military spending surge. Now in its fourth year, the conflict has shattered post-Cold War assumptions about European security, triggered NATO enlargement with Finland and Sweden, and forced previously reluctant spenders like Germany to commit to sustained high-level defence investment that will persist regardless of when or how the conflict concludes.
The 2025 Hague Summit commitment to 5% of GDP by 2035 — driven primarily by US pressure from the Trump administration — represents a generational shift in NATO's financial architecture. All 32 members met the 2% threshold in 2025 for the first time. The 5% target, if met, would add trillions of dollars to annual global military expenditure, fundamentally reshaping defence procurement markets, industrial capacity requirements, and fiscal priorities across the alliance.
China's three-decade military build-up has catalysed parallel build-ups among its neighbours. Japan's defence spending doubled from ~1% to ~2% of GDP — a post-war constitutional landmark. Australia accelerated AUKUS nuclear-powered submarine procurement and long-range strike programs. South Korea expanded its indigenous defence exports while growing its own budget. The Indo-Pacific is now the most dynamic arms procurement region globally, with no clear resolution to the underlying territorial and political disputes driving investment.
The Ukraine war has demonstrated the transformational battlefield impact of drone warfare, electronic warfare, and precision strike — reshaping procurement priorities globally. Nations are investing heavily in unmanned systems at every scale, AI-enabled command-and-control, directed energy weapons, and hypersonic missiles. These technology investments are often categorised separately from traditional force structure spending, meaning official budget figures understate the true pace of capability investment in leading militaries.
Across NATO and allied nations, the binding constraint on military build-up is no longer budget commitment but industrial manufacturing capacity. Artillery shell production, missile inventories, shipyard capacity, and combat vehicle production lines — many scaled back during the post-Cold War peace dividend — cannot be rapidly expanded. The EU's European Defence Industry Programme and multiple national industrial mobilisation plans reflect the recognition that spending commitments alone cannot deliver combat readiness without sustained multi-year industrial investment.
Beyond the top-tier spenders, Middle Eastern and African regional conflicts sustain persistent demand for military equipment, training, and base infrastructure. Israel's multi-front posture, Saudi–Iran proxy competition, and a proliferation of Sahel instability zones have created durable military procurement requirements across a tier of mid-sized regional military powers that are not captured in top-15 rankings but collectively account for a significant share of global arms import demand.
The Path to $3 Trillion — Global Military Spending Forecasts to 2030
The structural forces driving the current military spending surge show no signs of reversal. The Russia–Ukraine war continues without resolution; China's defence modernisation trajectory is institutionally embedded; the NATO 5% target commits European and North American allies to sustained above-GDP spending growth for a decade; and the Indo-Pacific security competition is intensifying rather than stabilising. Analysts broadly project global military expenditure will cross $3 trillion before 2030 — a level that would represent a 60% increase from the 2020 baseline in just one decade.
Key Drivers of Growth Through 2030
Frequently Asked Questions
The United States has the highest military spending of any country in the world. In 2025, the US defence budget reached approximately $980 billion — more than the next 10 largest defence spenders combined — representing roughly 3.4% of US GDP and about 37% of total global military expenditure. The 2026 US defence budget was approved at $901 billion, with a proposal for a record $1.5 trillion in 2027 under President Trump.
Global military spending reached $2.63 trillion in 2025, up from $2.48 trillion in 2024, representing a 2.5% real-terms year-on-year increase, according to the IISS Military Balance 2026. The 2024 increase was even sharper: SIPRI recorded a 9.4% surge — the steepest single-year rise since at least the end of the Cold War — driven by Europe's rearmament response to the Ukraine war and Middle East escalation.
China spent an estimated $314 billion on its military in 2024 — a 7.0% increase marking three consecutive decades of growth — according to SIPRI data. The 2025 official Chinese defence budget included a further 7.2% hike. China is the world's second-largest military spender, accounting for roughly 12% of global defence expenditure. Independent analysts believe actual military-related spending exceeds official figures when paramilitary forces, defence R&D, and nuclear programs are included.
At the 2025 NATO Summit in The Hague, allies committed to a new target of 5% of GDP on core defence requirements by 2035 — an increase from the previous 2% benchmark. An interim target of at least 3.5% of GDP under the agreed NATO definition was also set. All 32 NATO members now meet the 2% threshold for the first time. Poland currently leads all NATO members at 4.48% of GDP, with Baltic states also exceeding 3.5%.
Germany became the biggest military spender in Western Europe for the first time since reunification in 2024, with spending of $88.5 billion after a 28% annual increase driven by its €100 billion special defence fund. In 2025, Germany's spending rose a further 18%, bringing its combined core budget and special modernisation fund to approximately €100 billion (~$109 billion). By proportion of GDP, Poland leads all NATO members at 4.48%.
Russia's official defence budget reached $161.2 billion in 2025, a 3% increase over 2024, according to the IISS Military Balance 2026. SIPRI estimated Russia's 2024 military expenditure at $149 billion — a 38% surge from 2023 and double the 2015 level — driven by wartime mobilisation for the Ukraine conflict. Russia now allocates an estimated 6.7% of GDP to military spending — the highest proportion among major economies.
Primary: SIPRI — Trends in World Military Expenditure 2024 (April 2025)
Primary: SIPRI Press Release — Unprecedented Rise in Global Military Expenditure (April 28, 2025)
Primary: IISS — The Military Balance 2026: Global Defence Spending
Primary: NATO — Defence Expenditures and NATO's 5% Commitment (2025)
Primary: UK Ministry of Defence — International Defence Expenditure Statistical Bulletin 2025
Additional: Visual Capitalist — Ranked: Top 15 Countries by Military Budgets in 2025 · Stars & Stripes — Europe Boosts Military Spending (Feb 25, 2026) · Statista — Countries with the Highest Military Spending Worldwide in 2024 · World Bank Military Expenditure (% of GDP) Database