Military spending surges in Europe and Asia, pushing world to levels not seen in 16 years, report says

A woman poses for photos at an outdoor exhibition commemorating the military parade in 1941 at Red Square in Moscow, Russia, Nov. 7, 2025. (Alexander Zemlianichenko Jr/Xinhua/Getty Images via CNN Newsource)

Global military spending surged by almost 3 per cent in 2025, fuelled largely by ballooning defence expenditures in Europe and Asia, according to a report released Monday by a respected arms watchdog group.

European defence spending jumped 14 per cent from 2024, to US$864 billion, and in Asia-Oceania the increase was 8.1 per cent, to $681 billion, the Stockholm International Peace Research Institute (SIPRI) said in its annual “Trends in World Military Expenditure” report.

Overall, almost $2.9 trillion was spent on military programs around the world in 2025, a 2.9 per cent increase from a year earlier. The figure represents 2.5 per cent of the world’s gross domestic product (GDP), the highest percentage since 2009, according to SIPRI.

The U.S., China, Russia, Germany and India were the biggest spenders, collectively accounting for 58 per cent of the global sum.

While the report notes that the year-on-year increase in total spend is a drop from the 9.7 per cent increase recorded in 2024, it says that was largely due to the United States approving no new spending to help arm Ukraine in 2025. SIPRI counts foreign military assistance on the accounts of the donor country.

When the U.S. is taken out of the statistics, global spending on defence rose 9.2 per cent in 2025, the report says.

Still, the U.S. remains the world’s No. 1 spender on the military – $954 billion in 2025 – followed by China, an estimated $336 billion, and Russia with an estimated $190 billion.

But it was U.S. allies around the world that led the spending increase, revealing some generational changes.

“In 2025 military spending by European NATO members rose faster than at any time since 1953, reflecting the ongoing pursuit of European self-reliance alongside increasing pressure from the United States to strengthen burden sharing within the alliance,” Jade Guiberteau Ricard, a researcher with the SIPRI Military Expenditure and Arms Production Programme, said in a statement.

NATO countries with big increases include Belgium (59 per cent), Spain (50 per cent), Norway (49 per cent), Denmark (46 per cent), Germany (24 per cent), Poland (23 per cent) and Canada (23 per cent).

Germany’s total military spending of $114 billion ranks it No. 4 worldwide.

In Asia, Japan increased military spending by 9.7 per cent to $62.2 billion, the report said. As a portion of Japan’s GDP, the 1.4 per cent spent on defence was the highest for the country since 1958, the report said.

“U.S. allies in Asia and Oceania such as Australia, Japan and the Philippines are spending more on their militaries, not only due to long-standing regional tensions but also due to growing uncertainty over U.S. support,” SIPRI senior researcher Diego Lopes da Silva said.

Meanwhile, Taiwan, the democratic, self-ruled island that the Chinese Communist Party claims as part of its territory despite never having controlled it, increased its military expenditures by 14.2 per cent to $18.2 billion (2.1 per cent of GDP), its biggest jump since at least 1988, according to the SIPRI.

Under the Taiwan Relations Act, Washington is legally required to provide the island with the means to defend itself, and it supplies Taipei with defensive weaponry.

China’s defence spending increased 7.4 per cent – the largest year-on-year jump in the past decade and the 31^st year in a row it has gone up – as Beijing moves to meet a 2035 goal to modernize its forces, the report said.

As a percentage of GDP, Ukraine is the world’s biggest military spender, at an estimated 40 per cent. Kyiv is in its fourth year fighting against a Russian invasion. Ukraine ranks No. 7 globally.

Russia devoted 7.5 per cent of its GDP to the military, as it spent 5.9 per cent more than in 2024.

“In 2025 military expenditure as a share of government spending reached the highest level ever recorded in both Russia and Ukraine,” said SIPRI researcher Lorenzo Scarazzato. “Their spending is likely to keep growing in 2026 if the war continues, with revenues from Russia’s oil sales increasing and a major European Union loan expected by Ukraine.”

Looking at other regions, Saudi Arabia was the biggest military spender in the Middle East at $83.2 billion, up 1.4 per cent year over year.

Israel followed Saudi Arabia in the region, spending $48.3 billion. That was down 4.9 per cent from a year earlier, the drop due to hostilities in Gaza easing after Israel and Hamas agreed to a ceasefire in January 2025, according to the SIPRI.

Iran saw its spending drop 5.6 per cent in real terms, but high inflation of 42 per cent plus funding from off-the-books oil sales means Tehran’s military expenditures likely increased, the report said.

“Official figures almost certainly understate the true level of Iran’s spending— Iran also uses off-budget oil revenues to finance its military, including the production of missiles and drones,” SIPRI researcher Zubaida Karim said.

In South Asia, India’s military spending, driven by a conflict with neighboring Pakistan, spiked 8.9 per cent to $92.1 billion. New Delhi ranks No. 5 in the world, and it outspent Islamabad by $80 billion.

In Africa, military spending jumped 8.5 per cent overall to $58.2 billion. That figure would rank the entire continent as No. 11 if it were a single country, behind Japan and ahead of Israel. Algeria is the continent’s biggest spender, and it ranks behind only Ukraine in GDP devoted to the military (25 per cent).

The current year promises to see even bigger increases in defence expenditures, the SIPRI said.

“Given the range of current crises, as well as many states’ long-term military spending targets, this growth will probably continue through 2026 and beyond,” SIPRI researcher Xiao Liang said in the report.

The U.S. is expected to be a big driver in that. Congress has already approved more than $1 trillion in defence spending in 2026 as the war against Iran, now about to enter its third month, is costing Washington about a billion dollars a day.

For 2027, the Trump administration is proposing a $1.5 trillion defence budget.

By Brad Lendon, CNN