Defense expenditures worldwide increased by 2.9% in 2025, reaching a record $2.89 trillion, according to new research from the Stockholm International Peace Research Institute released Monday.
The growth marks the eleventh year in a row that global military budgets have expanded, pushing defense spending to 2.5% of worldwide economic output – the largest percentage since 2009. This occurred even as the United States reduced its military expenditures by 7.5% after President Donald Trump stopped approving new financial assistance for Ukraine’s military efforts.
The research institute projects continued expansion in the coming years, stating: “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.”
Three nations – the United States, China, and Russia – dominated global spending, combining for $1.48 trillion, which represents just over half of all military expenditures worldwide.
American defense spending dropped to $954 billion in 2025, primarily due to the absence of new Ukraine military aid approvals. Over the prior three years, the U.S. had provided $127 billion in military support to Ukraine.
However, researchers expect the American spending decline to be temporary. “The decline in U.S. military expenditure in 2025 is likely to be short-lived,” the institute noted. “Spending approved by the U.S. Congress for 2026 has risen to over $1 trillion, a substantial increase from 2025, and could rise further to $1.5 trillion in 2027.”
European nations drove much of the global increase, with their combined military budgets rising 14% to reach $864 billion.
Both Russia and Ukraine maintained their upward spending trajectory in the fourth year of their ongoing conflict. NATO countries in Central and Western Europe posted their largest annual budget increases since the Cold War concluded.
Meanwhile, Israel’s military spending decreased 4.9% to $48.3 billion as fighting in Gaza diminished throughout 2025. Iran also reduced its defense budget for the second consecutive year, cutting expenditures by 5.6% to $7.4 billion.
