Global defence spending rose to $2.63 trillion in 2025, up 2.5 per cent year on year, as great power rivalry and national insecurity continued to drive military investment, according to the latest edition of The Military Balance published by the International Institute for Strategic Studies (IISS).
In its 67th annual assessment, the London-based think tank said defence dynamics are undergoing rapid change, shaped in part by a shift in United States policy under President Donald Trump’s second administration. The report states that US defence strategy has pivoted more clearly towards homeland defence and burden-sharing, including proposals for a multi-layered “Golden Dome” missile defence system.
Direct US support for Ukraine has been curtailed, the IISS notes, while American forces face simultaneous pressures in the Caribbean, Indo-Pacific and Middle East.
Four years after Russia’s full-scale invasion of Ukraine, Moscow’s limited territorial gains have come at what the report describes as a high cost. Russia has nevertheless adapted and regenerated its forces, maintaining overall capability despite heavy losses. Trackable Russian military expenditure rose by 3 per cent in real terms in 2025, moderating compared with previous years, but still accounting for 7.3 per cent of GDP. In absolute terms, defence spending is now roughly triple its 2021 level.
Europe’s share of global defence spending has climbed to 21 per cent, up from 17 per cent in 2022. Germany’s spending increase accounts for around a quarter of European growth since 2024, with further significant rises in Belgium, the Nordic states and Spain. The IISS cautions, however, that procurement reform across the continent remains slow and insufficiently innovative, while industrial capacity constraints continue to hamper rearmament and efforts to strengthen air and missile defence.
In Asia, Chinese defence spending growth continues to outpace that of its neighbours. Beijing’s share of regional military expenditure has risen to almost 44 per cent in 2025, compared with an average of 37 per cent between 2010 and 2020. Despite a recent purge within the People’s Liberation Army command structure, the IISS finds little evidence of a corresponding decline in capability.
China has maintained sustained military pressure around Taiwan and continued naval expansion. The PLA Navy has commissioned the aircraft carrier Fujian and at least nine new major surface combatants, while ten new nuclear-powered submarines were launched between 2021 and 2025. According to the report, this outpaced the US Navy over the same period in terms of hull numbers and tonnage.
In the Middle East and North Africa, defence spending reached $219 billion, with states allocating an average of 4.3 per cent of GDP to defence. The IISS notes strengthened US defence partnerships with Gulf states including Qatar, Saudi Arabia and the United Arab Emirates.
Of course we need to increase spending, not disputing that at all.
But this does make me remember that the ideal global defence budget is zero. In an unachievable perfect world, no money would be spent on arms at all by any nation on earth. Everything that is spent reflects human’s inability to coexist without conflict. shame really
we still need to spend more