The Global Surge in Military Spending: Trends and Implications in 2024-2025

The world is witnessing an unprecedented escalation in military expenditure, reaching record highs in 2024. This surge is driven by a complex interplay of escalating geopolitical tensions, ongoing conflicts, and a renewed focus on national security across the globe. As governments increasingly prioritize defense, the economic and social ramifications are becoming increasingly significant, with potential long-term effects on societies worldwide.

Global Military Expenditure Reaches All-Time High

In 2024, global military expenditure soared to an astounding $2.718 trillion, marking a significant 9.4% increase in real terms from 2023. This represents the steepest year-on-year rise recorded since at least the end of the Cold War. This upward trend signifies the tenth consecutive year of global increases in military spending, underscoring a decade-long pattern of escalating defense budgets. The global military burden, measured as the share of global gross domestic product (GDP) devoted to military expenditure, increased to 2.5% in 2024. This indicates a substantial reallocation of resources towards defense, with military spending per person reaching its highest point since 1990, at $334.

The Stockholm International Peace Research Institute (SIPRI) reported that over 100 countries worldwide raised their military spending in 2024, with all of the 15 largest spenders increasing their defense budgets.

Key Drivers of the Spending Surge

Several interconnected factors are fueling this dramatic increase in military spending:

Geopolitical Tensions and Ongoing Conflicts

The primary catalyst for the surge in military expenditure is the heightened geopolitical instability and the continuation of major conflicts. The ongoing war in Ukraine, now in its third year, has prompted significant defense spending increases across Europe as nations bolster their military capabilities and modernize their armed forces.

The Middle East remains a volatile region, with the war in Gaza and escalating regional conflicts contributing to increased defense spending. Israel, in particular, saw a dramatic surge in its military expenditure, driven by its ongoing operations and heightened tensions.

In Asia, rising tensions in the South China Sea and concerning developments around Taiwan have also accelerated regional military build-ups.

NATO’s Response and European Rearmament

The North Atlantic Treaty Organization (NATO) has seen a substantial increase in collective defense spending. In 2024, total military expenditure by NATO members amounted to $1.506 trillion, accounting for 55% of global military spending. A record number of NATO members, 18 out of 32, met the alliance’s guideline of spending at least 2.0% of GDP on their militaries in 2024, a significant increase from 11 in 2023. This surge in European defense spending is the main contributor to the global increase, pushing military expenditures beyond Cold War levels.

The war in Ukraine has acted as a catalyst for a broader rearmament across Europe, with countries like Germany and Poland significantly increasing their defense budgets. Germany’s military expenditure rose by 28% to $88.5 billion, making it the largest spender in Central and Western Europe. Poland’s spending grew by 31% to $38.0 billion, representing 4.2% of its GDP.

Shifting Defense Priorities

Beyond traditional military hardware, there is a growing emphasis on new defense technologies and capabilities. Procurement priorities now include artillery systems, ammunition, main battle tanks, armored vehicles, air defense missiles, drones, and investments in survivability upgrades to counter advanced missile threats and electronic warfare. The increasing importance of cybersecurity and AI in warfare is also driving significant investment.

Top Military Spenders in 2024

The five largest military spenders in 2024 were the United States, China, Russia, Germany, and India. These nations collectively accounted for 60% of the world’s military spending, totaling approximately $1.635 trillion.

• United States: The U.S. remained the world’s largest military spender, allocating an estimated $997 billion in 2024. This represents 37% of global military spending and 66% of total NATO spending.
• China: China’s military spending was an estimated $314 billion, making it the second-largest spender globally.
• Russia: Russia’s military expenditure grew by a substantial 38% in 2024 to an estimated $149 billion, equivalent to 7.1% of its GDP.
• Germany: Germany’s military spending increased by 28% to $88.5 billion, positioning it as the fourth-largest spender globally and the largest in Central and Western Europe.
• India: India ranked as the fifth-largest military spender, with an expenditure of $86.1 billion, representing a 1.6% year-on-year growth.

Other significant spenders include the United Kingdom ($81.8 billion), Saudi Arabia ($80.3 billion), Ukraine ($64.7 billion), France ($64.7 billion), and Japan ($55.3 billion).

Regional Spending Trends

Military spending increased across all five geographical regions in 2024, reflecting heightened geopolitical tensions worldwide.

• Europe: Military spending in Europe, including Russia, rose by 17% to $693 billion, making it the primary contributor to the global increase. All European countries, except Malta, increased their military spending.
• Middle East: Military expenditure in the Middle East reached an estimated $243 billion, a 15% increase from 2023.
• The Americas: Military expenditure in the Americas totaled $1100 billion, a 5.8% increase from 2023. North American spending rose by 5.7% to $1027 billion.
• Asia and Oceania: China accounted for 50% of all military spending in this region, investing in modernization and cyber warfare capabilities. Japan’s military spending saw a significant 21% increase.
• Africa: Military expenditure in Africa totaled $52.1 billion, a 3.0% increase from 2023.

Economic and Social Implications

The substantial rise in military spending carries significant economic and social implications. As governments increasingly prioritize military security, often at the expense of other budget areas, the economic and social trade-offs could have profound effects on societies for years to come. This reallocation of resources may impact social spending, international aid, and other critical public services.

Simulations suggest that increased defense spending could lead to a less contractionary fiscal stance in the EU, potentially boosting GDP by 0.5% above the baseline by 2028, but also increasing the EU government debt-to-GDP ratio by 2 percentage points.

Future Outlook

The trend of increasing military expenditure is expected to continue into 2025 and beyond. Many countries have made commitments to raise military spending, and the ongoing geopolitical landscape suggests sustained demand for defense capabilities. The defense industry is also undergoing a transformation, with a growing focus on digital technologies, artificial intelligence, cybersecurity, and advanced manufacturing techniques.

The global defense industry is adapting to a new era of “permanent mobilization,” driven by persistent threat perceptions and strategic competition. This sustained investment in defense is likely to shape military capabilities well into the 2030s, presenting both opportunities and challenges for governments, industries, and societies worldwide.