SIPRI: Global military spending hits record $2.9 trillion as Europe leads surge

Global military expenditure rose for an 11th consecutive year in 2025, reaching an unprecedented $2.887 trillion, as wars in Ukraine and Gaza and widening geopolitical tensions fuelled a sustained global arms buildup, according to the Stockholm International Peace Research Institute (SIPRI).

Europe recorded the steepest rise, while spending increases across Asia and shifts in US budgets underscored a broadening international security competition, DW reports based on SIPRI data.

Global military spending has now reached its highest level ever recorded, reflecting what SIPRI researchers describe as an era of prolonged instability.

“This really speaks to countries' reactions to ongoing wars, tensions and geopolitical uncertainty,” said Xiao Liang, a researcher in SIPRI's Military Expenditure and Arms Production Program. “With all these crises still ongoing, and many countries' long-term spending plans already locked in, this trend will probably continue through 2026 and beyond.”

Europe was the main driver of the 2025 increase, with regional spending rising 14% to $864 billion. Russia’s war in Ukraine has fundamentally reshaped defence priorities across the continent, accelerating rearmament and long-term military planning. 

“That is definitely the biggest driver,” said Liang. “In recent years, we've seen Russia's and Ukraine's own spending as the main factor in Europe. Their spending was still rising in 2025. But in terms of overall spending, the focus has shifted more towards Central and Western European countries, as their militarization and spending plans begin to materialize. They recorded the highest annual growth since the end of the Cold War last year.”

Germany emerged as Europe’s largest spender, increasing its defence budget by 24% to $114 billion, surpassing NATO’s 2% of GDP target for the first time since reunification. Structural fiscal reforms allowed additional borrowing for defence expansion. 

“I don't think that Germany's military capability is rising as fast as the spending figure suggests,” Liang said. “But I think in the long term, Germany is becoming more powerful and more independent militarily.”

In contrast, US military spending fell 7.5% to $954 billion, largely due to the absence of new Ukraine aid packages. However, analysts expect a reversal.

“That trend is already turning,” said Liang. “The new 2026 budget approved by the US Congress is signaling a big increase. With the war in the Middle East and tensions rising in Asia, the slowdown is probably going to be short-lived.”

Despite regional variations, SIPRI notes that the global trend reflects broader structural change.

“This is less about the biggest spenders cutting back,” Liang said, “and more about widespread increases elsewhere, especially among middle-power countries.”

He warned: “That just means more arms and more weapons,” he said. “A new arms race reduces trust and increases the risk of miscalculation”

China remained the world’s second-largest military spender, increasing its budget by 7.4% as it advanced long-term modernization plans.

“China's military modernization and tensions with its neighbors have long driven higher spending in the region, especially in countries like Japan, Taiwan and the Philippines,” he said. “But in 2025, this was also about changing security thinking among US allies. Countries such as Australia, Japan and Taiwan are under growing pressure to spend more on defense and become more self-reliant.”

Japan’s defence spending rose 9.7% to $62.2 billion, while India—ranked fifth globally—expanded its budget by 8.9% to $92.1 billion amid tensions with both China and Pakistan.

“There was also a war between India and Pakistan in 2025. That was a big factor, and they invested heavily in aerospace and drones, which were used a lot in that conflict.”

SIPRI also warned of broader economic consequences as global “military burden” rose to 2.5% of GDP, the highest since 2009.

“This will affect other areas of public spending,” Liang said. “Governments may cut social services or development aid. So, this isn't only about wars and weapons — it will have deep effects across societies.”

By Sabina Mammadli