Newly published data show global military expenditure reached $2.887 trillion in 2025, with Europe recording a 14 per cent rise as NATO members, Russia and Ukraine continued to expand defence budgets.

Global military expenditure rose again in 2025, with Europe recording one of the sharpest regional increases as governments adjusted to Russia’s war against Ukraine, NATO burden-sharing pressure and wider security uncertainty.

The latest annual military expenditure data, published on 27 April, show world military spending reached $2.887 trillion in 2025. That represented a 2.9 per cent real-terms increase over 2024 and the eleventh consecutive annual rise.

The global increase was slower than the 9.7 per cent rise recorded in 2024, largely because United States military spending fell during the year. Outside the US, however, total spending rose by 9.2 per cent. That distinction is significant for Europe, where defence budgets continued to move upwards at a pace not seen for decades.

European military expenditure increased by 14 per cent to $864 billion in 2025. The rise was driven by continued spending by Russia and Ukraine, as well as rearmament programmes among European NATO members. In Central and Western Europe, the annual growth rate was the highest since the end of the Cold War.

The figures show that the debate over European defence spending has moved beyond political declarations. Governments are now allocating larger sums to armed forces, procurement, personnel, infrastructure and military support functions. The issue for policymakers is no longer only whether budgets should rise, but whether additional money can be converted into usable military capability.

The fact sheet accompanying the data states that military expenditure by the 32 NATO members amounted to $1.581 trillion in 2025, equal to 55 per cent of global spending. European NATO members accounted for $559 billion. On the institute’s methodology, 23 NATO members spent at least 2 per cent of GDP on their militaries in 2025.

Germany recorded one of the most notable increases. Its military expenditure rose by 24 per cent year on year to $114 billion, making it the largest military spender among European NATO members. Germany’s military burden reached 2.3 per cent of GDP, exceeding the 2 per cent threshold for the first time since 1990.

Spain also recorded a substantial rise, with military spending increasing by 50 per cent to $40.2 billion. That brought Spain above the 2 per cent level for the first time since 1994 under the same methodology. These figures underline how the NATO spending benchmark, once missed by many European allies, has become a more central measure of political and fiscal commitment.

The pressure on European governments is also shaped by the scale of spending by Russia and Ukraine. Russia’s military expenditure rose by 5.9 per cent to $190 billion in 2025, giving it a military burden of 7.5 per cent of GDP. Ukraine, the seventh-largest spender globally in 2025, increased military spending by 20 per cent to $84.1 billion, equivalent to 40 per cent of GDP.

Those numbers show the intensity of the war economy on both sides. They also explain why European NATO members continue to face pressure to increase production, rebuild stockpiles and expand readiness. Ammunition, air defence, drones, long-range strike systems and logistics capacity remain central areas where spending increases must be matched by industrial output.

The United Kingdom and France showed a different pattern. UK military spending decreased by 2 per cent to $89 billion between 2024 and 2025, while French expenditure rose by 1.5 per cent to $68 billion. These figures do not necessarily capture longer-term procurement commitments, but they do show that the overall European increase was not evenly distributed.

Asia and Oceania also recorded rapid growth. Military expenditure in the region rose by 8.1 per cent to $681 billion, the largest annual increase since 2009. China, the world’s second-largest military spender, increased expenditure by 7.4 per cent to $336 billion. Japan’s spending rose by 9.7 per cent to $62.2 billion, while Taiwan’s rose by 14 per cent to $18.2 billion.

For Europe, the strategic implication is that defence spending is rising in more than one theatre at the same time. The transatlantic alliance faces pressure in Europe, while the United States remains heavily engaged in Indo-Pacific deterrence. This reinforces calls within Europe for greater self-reliance, not as a replacement for NATO, but as a practical response to constrained American capacity and shifting political priorities.

Higher spending alone does not resolve Europe’s defence problem. Many armed forces still face personnel shortages, delayed procurement, fragmented national requirements and limited industrial surge capacity. The risk is that larger budgets may not immediately produce the forces, stocks and readiness levels required for credible deterrence.

The 2025 figures nevertheless confirm a structural change in European defence policy. Military expenditure is no longer treated as a temporary response to a single crisis. It is becoming a longer-term fiscal and industrial priority, shaped by war in Ukraine, uncertainty over US commitments, and the need to rebuild conventional deterrence after decades of reduced investment.