The world has never spent as much money on the military as in 2025. Driven by numerous wars and conflicts, global military spending reached a new high for the eleventh year in a row, according to the Stockholm peace research institute Sipri. Adjusted for inflation, spending rose by 2.9 percent compared to the previous year. Within a decade they even grew by 41 percent.
In 2025, all countries together spent almost 2.89 trillion US dollars (almost 2.47 trillion euros) on the military. However, the increase was significantly lower than in 2024. The peace researchers attributed this to a decline in US military spending. The main reason for this: the lack of aid for Ukraine. In contrast, the United States invested more in its own nuclear and conventional military capabilities.
Despite the decline, the USA remained the country with by far the largest expenditure on the military (the equivalent of almost 814 billion euros). In the future, the number is likely to rise again, said Sipri expert Diego Lopes da Silva: “The USA has already announced plans to increase its military spending.”
Uncertainty fuels military spending
According to the researchers, the fact that global military spending increased again overall in 2025 is primarily due to the rearmament in Europe. European countries’ spending rose by 14 percent last year.
The uncertainty as to the extent to which the USA will support them as a reliable NATO partner in the future certainly played a role for many countries, said da Silva. “When you see international security deteriorating, it creates an atmosphere of insecurity – and to feel safer, countries put more money into their military.”
Germany leads the ranking in Europe
The Federal Republic came fourth in the ranking of countries with the highest spending – behind the USA, China and Russia, but ahead of all other European countries. Compared to the previous year, expenses rose by 24 percent to 114 billion dollars (around 97 billion euros). For the first time since 1990, German defense spending exceeded NATO’s two percent target. According to Sipri research, a total of 22 of the European NATO partners exceeded this mark.
Russia and Ukraine again spent more money on the military in the fourth year of the war. In Ukraine, military spending accounted for a full 40 percent of gross domestic product – an even larger share than in 2024. According to Sipri, the country invested more than 60 percent of government spending in its military. “This is a huge share of public spending and it is difficult to see how it could increase any further without compromising the provision of basic public services,” da Silva said.
Military spending also increased again in many Asian countries such as China, Japan, Taiwan, India and Pakistan in view of numerous conflicts and tensions. In the Middle East, however, they only increased slightly in 2025. In Israel, spending even fell, which Sipri researchers attribute “to a reduction in the intensity of the war in Gaza following the ceasefire agreement with Hamas in January 2025.”
How much money does Iran put into its military?
In Iran, military spending even fell, adjusted for inflation, due to the difficult economic situation. According to Sipri, they rose without taking high inflation into account. “However, the official figures almost certainly underestimate the actual expenditure,” says Sipri expert Zubaida Karim. “Iran also uses unbudgeted oil revenues to fund its military, including the production of missiles and drones.”
Sipri researcher da Silva estimates that the trend of increasing military spending will continue in 2026. “There are currently very, very many conflicts around the world. And it is very difficult to imagine that the situation will improve so much within a year that this trend will be reversed.”
The annual Sipri report on military spending around the world is considered the most comprehensive data collection of its kind. The peace researchers also include expenses for personnel, military aid and military research and development.
