Countries With the Biggest Defence Budgets in the World (2025)

Global military spending reached $2.72 trillion in 2024 — a 9.4% real-terms increase over 2023, the steepest year-on-year rise since at least the end of the Cold War, according to SIPRI. The world is not drifting toward this level of military expenditure; it is being driven there by simultaneous crises: a land war in Europe that has been running since 2022, an accelerating Chinese military build-up, a Middle East in armed conflict, and a global arms control architecture that has largely collapsed. The countries with the biggest defence budgets are pulling further ahead, and the gap between major and minor military powers is widening faster than at any point in the post-Cold War era.

Methodology: How Defence Budgets Are Measured and Compared

Comparing defence budgets across countries involves genuine methodological challenges that are important to understand before reading any ranking. This article uses SIPRI Military Expenditure Database figures — the most widely cited independent source — expressed in current U.S. dollars for 2024, updated with available 2025 estimates where published.

Three caveats apply consistently. First, countries define "defence spending" differently. China's official defence budget excludes certain categories — including elements of the People's Armed Police and some research programmes — that Western analysts believe should be counted. Including these, SIPRI estimates China's true expenditure is 15–25% above its official figure. Second, purchasing power parity (PPP) matters enormously: a dollar of Chinese or Russian military spending buys substantially more domestic labour than a dollar of U.S. spending, because wages are lower. Third, the figures below represent budgets or appropriations — actual disbursements can differ, particularly for countries with large supplemental wartime spending packages (Ukraine, Israel).

Source: SIPRI Military Expenditure Database; SIPRI Fact Sheet: World Military Expenditure 2024, April 2025.

Top 20 Biggest Defence Budgets in the World (2024–2025)

Rank	Country	Defence Budget (2024, SIPRI)	% of GDP	Change vs 2023
1	USA	$997 billion	~3.4%	+5.7%
2	China	$314 billion	~1.7%	+7.0%
3	Russia	$149 billion	~7.1%	+18% est.
4	Germany	$88.5 billion	~2.1%	+28%
5	India	$86.1 billion	~2.4%	+4.7%
6	Saudi Arabia	$75 billion	~7.0%	+3.0%
7	UK	$74 billion	~2.3%	+6.5%
8	Ukraine	$65 billion est.	~34%	+40% est.
9	France	$61 billion	~2.1%	+5.9%
10	Japan	$55 billion	~1.4%	+26%
11	South Korea	$50 billion	~2.8%	+4.5%
12	Australia	$40 billion	~2.0%	+9.5%
13	Israel	$38 billion	~8.3%	+24%
14	Italy	$37 billion	~1.7%	+8.5%
15	Canada	$35 billion	~1.7%	+10%
16	Poland	$34 billion	~4.2%	+15%
17	Netherlands	$23 billion	~2.0%	+17%
18	Taiwan	$19 billion	~2.6%	+13%
19	Spain	$18 billion	~1.3%	+12%
20	Brazil	$17 billion	~1.5%	+3.0%

Source: SIPRI Military Expenditure Database (April 2025 update); SIPRI Fact Sheet: World Military Expenditure 2024; NATO Defence Expenditure Report 2014–2024.

Where this data comes from

This ranking draws entirely from the Stockholm International Peace Research Institute's Military Expenditure Database (SIPRI MILEX), the most widely cited authoritative source on comparative military spending. SIPRI collects data from national defence ministry budgets, financial reports, and parliamentary appropriations across 180+ countries, supplemented by estimates from credible open-source defence analysis where official figures are incomplete or opaque (e.g., China, Russia, some Gulf states). Figures are expressed in current U.S. dollars for 2024, with estimated 2025 figures where announced. The database accounts for exchange rate fluctuations and inflation; real-terms change figures are inflation-adjusted using U.S. GDP deflators. Percentage of GDP figures use nominal GDP from IMF World Economic Outlook data. Caveats include: China's unofficial spending may be 15–25% higher than official figures; purchasing power parity matters significantly for labor-intensive components; and some supplemental wartime spending (Ukraine, Israel) may not be fully captured in annual budget figures.

Why defence spending ratchets up more easily than it comes down

The countries with the highest defence budgets relative to their economies—Ukraine (34% wartime), Israel (~8%), Russia (~7%), Saudi Arabia (~7%)—demonstrate a ratchet effect: military spending increases rapidly in response to genuine security threats but rarely decreases proportionally when threats recede, because the institutional and industrial base once built becomes politically self-sustaining. Germany provides the clearest recent example: spending collapsed from ~2% (Cold War era) to 1.3% (2020) during the "peace dividend" years, then suddenly reversed to 2.8% (2024) after February 2022. The reversal happened not because Germany's wealth changed but because its threat perception did. Once Germany began the €100 billion rearmament, defence industry investments (new factories, supply chains, labor retraining) create political constituencies that lobby to maintain spending even if initial threat assessments later ease. The same dynamic applies globally: China's steady 7% annual increases over 23 years reflect rational response to strategic competition with the USA, but those increases have fundamentally altered the military balance across the Pacific. Europe's rearmament is explicitly described by NATO and EU officials as long-term, not cyclical, suggesting current spending levels are expected to become the new floor. The structural implication is that once major powers begin rearmament cycles, reversal requires either external constraints (arms control agreements, which currently barely exist) or the resolution of underlying conflicts—neither of which is likely in the 2025 geopolitical environment.

A Brief History of the Current Rearmament Cycle

The post-Cold War "peace dividend" — the expectation that defence spending could be reduced as geopolitical competition gave way to multilateral cooperation — lasted roughly from 1991 to 2014. During that period, most Western countries cut their military budgets in real terms, consolidated defence industries, and drew down reserve stocks of ammunition and equipment that they assumed would never be needed. The U.S. was partially an exception, maintaining high spending through the wars in Afghanistan and Iraq, but even U.S. military investment in conventional warfighting capabilities declined as counterinsurgency dominated strategic planning.

Russia's annexation of Crimea in 2014 produced the first reversal of this trend, prompting NATO to agree on the 2% of GDP spending guideline at the Wales Summit. The response was slow: in 2014, only three NATO members met the 2% threshold. The full-scale invasion of Ukraine in February 2022 shattered whatever remained of the peace dividend consensus. European governments that had spent a decade finding reasons not to increase defence budgets suddenly found those reasons inadequate. Germany's announcement of a €100 billion special defence fund within days of the invasion was politically unthinkable one week before it happened.

The current rearmament cycle is not driven by a single crisis but by the convergence of three: the European land war, the Taiwan Strait tension, and the broader fracturing of the post-1945 international order. Unlike previous rearmament cycles, this one is happening simultaneously across multiple alliance systems in multiple regions, generating sustained demand that is testing the production capacity of defence industries worldwide.

Source: SIPRI Military Expenditure Database; NATO, Defence Expenditure of NATO Countries 2014–2024.

Why Defence Spending Is Hard to Reduce Once Started

Defence budgets have a ratchet quality: they increase easily and decrease painfully. The reason is structural. Building a credible military force requires sustained, predictable investment over years and decades — aircraft take 10–15 years from order to delivery, ship programmes last 30+ years, and trained professional soldiers represent 15–20 years of individual investment. Cutting budgets interrupts these programmes, stranding sunk costs and creating capability gaps that take generations to fill.

Think of it like maintaining a cathedral: the roof, foundations, and structural elements require constant investment, and deferring maintenance does not save money — it multiplies future costs. NATO countries that cut defence spending after 1991 discovered this in 2022, when they found their ammunition stocks so depleted that sustaining Ukraine aid while maintaining minimum deterrence was genuinely difficult.

The political economy also matters: defence industries generate high-skilled jobs in politically significant constituencies, and the industrial lobbying that follows initial budget increases reinforces the ratchet. Once Rheinmetall builds a new ammunition production line in response to German rearmament, that production line does not disappear when a future government wants to cut the defence budget.

The United States: In a League of Its Own

The U.S. defence budget of $997 billion in 2024 — crossing the symbolic $1 trillion threshold when supplemental appropriations are included — is so large that it defies easy comprehension. It includes approximately $237 billion for military personnel, $364 billion for operations and maintenance, $174 billion for procurement of new weapons, and $140 billion for research, development, testing, and evaluation (RDT&E) — the largest military R&D programme in human history.

To contextualise the scale: the United States spent more on defence in 2024 than China, Russia, Germany, India, Saudi Arabia, the UK, and Japan combined. The Pentagon's annual budget exceeds the total GDP of all but roughly 15 countries. This spending buys a genuinely global military posture: the United States maintains bases in over 80 countries, operates 11 aircraft carrier battle groups, funds three legs of a nuclear triad on permanent alert, and underwrites the security of dozens of allied nations through treaty commitments, forward-deployed forces, and security guarantees.

The U.S. defence budget accounts for 66% of total NATO spending and 37% of all world military expenditure, according to SIPRI's 2024 figures. This concentration within a single alliance is without historical precedent.

Source: SIPRI Fact Sheet: World Military Expenditure 2024.

What the U.S. is actually buying

The 2024–2025 procurement priorities reflect lessons from Ukraine and strategic competition with China. The Navy is accelerating submarine construction (Virginia-class attack submarines, Columbia-class ballistic missile submarines) to counter China's rapidly expanding fleet. The Air Force is procuring B-21 Raider stealth bombers and upgrading nuclear command-and-control infrastructure. The Army is investing heavily in long-range precision fires — specifically the Precision Strike Missile (PrSM) and various artillery upgrades — after watching artillery performance in Ukraine. Missile defence procurement is expanding across all services.

China: Closing the Gap Faster Than Any Previous Challenger

China's official defence budget of $314 billion in 2024 represents a 7.0% increase over 2023 — continuing an unbroken trend of year-on-year real increases that has seen Chinese military spending grow approximately 600% in real terms since 2000. No major power in history has sustained this rate of military investment growth for this long in peacetime.

China is the world's second-largest defence spender by a significant margin, but the gap with the United States is wider than headline figures suggest. Independent analysts including SIPRI and the IISS believe China's true military expenditure is 15–25% higher than officially reported when off-budget items are included. However, adjusting for purchasing power parity significantly narrows the effective gap: a dollar of Chinese defence spending buys substantially more domestic labour, food, housing for troops, and some domestically manufactured equipment than a dollar of U.S. spending. Adjusted for PPP, China's effective military purchasing power is estimated at roughly $550–600 billion equivalent — which explains China's ability to build the world's largest navy by vessel count while spending a fraction of what the United States does.

China's procurement focus is on capabilities specifically designed to complicate U.S. military operations in the Western Pacific: anti-ship ballistic missiles (DF-21D, DF-26), which can threaten aircraft carriers at ranges of 1,500–4,000 km; a rapidly expanding submarine fleet; advanced air defence systems; and a space and cyber warfare capability that targets U.S. intelligence and communications infrastructure.

Europe's Rearmament: Germany and Poland Lead

The Russian invasion of Ukraine triggered the most significant European defence spending increase since the Cold War, producing remarkable reversals in countries with long histories of budget restraint.

Germany represents the sharpest turn. Berlin spent just 1.3% of GDP on defence as recently as 2021 and was repeatedly criticised by NATO partners and U.S. administrations for free-riding on American security guarantees. Within days of the February 2022 invasion, Chancellor Olaf Scholz announced a €100 billion special defence fund — the Sondervermögen — and a permanent commitment to exceeding the 2% NATO target. Germany's 2024 defence budget of $88.5 billion represented a 28% real increase over 2023, making Germany the fourth-largest military spender in the world and the largest in Central and Western Europe.

Poland has gone further. Allocating 4.2% of GDP to defence in 2024, Poland has become NATO's most aggressive military spender in proportional terms among established members. Poland has ordered F-35A fighters, South Korean K2 tanks and K9 howitzers (980 and 648 units respectively), Patriot air defence systems, and HIMARS rocket artillery. The Polish government has described Russia as an existential threat and is building one of Central Europe's most capable ground forces with explicit intent to deter rather than fight.

The UK has committed to increasing spending from 2.3% to 2.5% of GDP by 2027, with further increases to 3% under discussion. Sweden, Finland, the Netherlands, and Denmark have all exceeded the 2% threshold. Twenty-three of NATO's 32 members met or exceeded 2% in 2024, up from just seven in 2014.

Source: NATO, Defence Expenditure of NATO Countries 2014–2024, June 2024.

Russia: War Economics and Fiscal Stress

Russia's $149 billion in defence spending in 2024 represents approximately 7.1% of GDP and 19.1% of total government spending — the highest military burden on its economy since the Soviet era. The war in Ukraine has necessitated simultaneously funding front-line combat operations, replacing enormous materiel losses (estimated at thousands of armoured vehicles and hundreds of aircraft), and maintaining strategic nuclear forces.

Russian defence spending increased by an estimated 18% in 2023 and continued to grow in 2024, straining a government budget heavily dependent on oil and gas revenues. Sanctions have restricted Russia's access to Western electronic components, forcing its defence industry to substitute domestically or source from China, Iran, and North Korea — with varying quality consequences.

The key analytical question about Russian defence spending is sustainability. At 7% of GDP and nearly 20% of government spending, the military burden is crowding out education, infrastructure, and healthcare. Oil and gas revenues — which typically fund 35–45% of the Russian federal budget — are subject to price volatility and have been pressured by Western sanctions. Most Western analysts expect Russia to face difficult trade-offs between military and social spending within the next 3–5 years unless the Ukraine conflict ends.

Ukraine: The Wartime Extreme

Ukraine's defence spending trajectory has no modern parallel. Forced to defend against a full-scale invasion, Ukraine's military expenditure reached approximately $65 billion in 2024 — an extraordinary 34% of its war-reduced GDP. This is primarily funded by foreign military and financial aid: the United States has provided approximately $75 billion in security assistance since February 2022, the European Union approximately $40 billion, and the United Kingdom approximately $10 billion, with dozens of other NATO members contributing substantial additional amounts.

Ukraine's own defence budget has expanded from approximately $6 billion pre-war to over $20 billion from domestic resources, funded partly through emergency taxation and partly through IMF and World Bank emergency budget support. Ukraine's military spending is not a policy choice in the conventional sense; it is an existential response.

Japan: The Historic Policy Reversal

Japan's 2024 defence budget of $55 billion — up 26% from 2023 levels — reflects the most significant shift in Japanese defence policy since the post-World War II constitution was written. For decades, Japan maintained a self-imposed guideline of approximately 1% of GDP on defence spending, reflecting constitutional commitments to pacifism and post-war political consensus.

The government of Fumio Kishida announced in December 2022 a plan to double defence spending to 2% of GDP by fiscal year 2027 — the largest peacetime military build-up in Japanese history. The 2025 budget is procuring Tomahawk land-attack cruise missiles (a capability Japan has never previously fielded), expanding destroyer and submarine fleets, developing indigenous long-range missiles under the "stand-off defence capability" programme, and acquiring more F-35 aircraft. The strategic driver is explicit: the combination of China's rapid military build-up, North Korea's ballistic missile and nuclear programme, and uncertainty about U.S. commitment to Asia-Pacific security.

India: Strategic Autonomy Through Modernisation

India's $86.1 billion defence budget in 2024 makes it the world's fifth-largest military spender. India's spending trajectory is shaped by a unique strategic environment: simultaneous management of the world's largest unsettled land border disputes, with both China (Line of Actual Control, approximately 3,488 km) and Pakistan (Line of Control, approximately 770 km).

The 2020 Galwan Valley clash with China — which resulted in casualties on both sides and the worst India-China military confrontation in decades — accelerated Indian procurement, particularly for mountain warfare equipment, air defence, and border infrastructure. India has imported from Russia (S-400 air defence), France (Rafale fighters), and the United States (Apache helicopters, C-17 transports, P-8I maritime patrol aircraft), while simultaneously pursuing indigenous production under the "Aatmanirbhar Bharat" (Self-Reliant India) initiative.

India's defence budget is constrained by its fiscal position — India's government debt-to-GDP ratio is approximately 85%, limiting the pace of spending increases — but the long-term trajectory is upward as India's economy grows toward its goal of becoming a $5 trillion economy.

Saudi Arabia and the Gulf: Oil Revenue and Regional Competition

Saudi Arabia at $75 billion (approximately 7% of GDP) and the UAE's separate defence spending (approximately $22 billion) reflect the Gulf states' use of hydrocarbon revenues to build substantial military forces in a volatile regional environment. Saudi Arabia is simultaneously managing the aftermath of its Yemen intervention, navigating Iran's regional influence, and undertaking a massive social and economic transformation under Vision 2030.

Saudi Arabia is the world's largest arms importer and has been a major customer for U.S. (F-15, THAAD, Patriot, AWACS), UK (Typhoon, Tornado legacy), and French (Leclerc tank upgrades, various missile systems) equipment. The strategic relationship with the United States — anchored in the security-for-oil arrangement dating to 1945 — remains the foundation of Saudi defence policy, though Gulf states have diversified relationships with China and others in non-security domains.

Frequently Asked Questions

Q: Which country has the biggest defence budget in 2025? The United States, with $997 billion in 2024 (SIPRI figure) — approximately 37% of all global military spending. Including all supplemental appropriations, U.S. defence spending crossed $1 trillion in fiscal year 2024 for the first time.

Q: Which country spends the most on defence as a percentage of GDP? Ukraine leads with approximately 34% of its war-reduced GDP devoted to defence in wartime. Among peacetime countries not in active conflict, Saudi Arabia (~7% GDP), Russia (~7.1%), and Israel (~8.3% including wartime supplemental spending) are at the top of the list.

Q: How much does NATO collectively spend on defence? NATO collectively spent approximately $1.47 trillion on defence in 2024, representing approximately 54% of global military expenditure. The U.S. alone accounts for roughly 66% of total NATO spending.

Q: Why does China's official budget number understate its real spending? China's official defence budget excludes certain categories that Western analysts count, including aspects of the People's Armed Police (an internal security force with genuine military capability), some R&D conducted through civilian institutions, and certain space and cyber programmes. SIPRI estimates the true figure is 15–25% above the official number.

Q: Is Germany now a major military power again? Germany is now the fourth-largest defence spender in the world by budget. But spending is a lagging indicator of military capability: Germany's armed forces (Bundeswehr) have faced decades of underinvestment in readiness, spare parts, and training that cannot be reversed in two years. Germany is on a trajectory to become a major conventional military power within the next 5–10 years, but it is not there yet.

Q: What do defence budget increases actually buy? The priorities in the current rearmament cycle, shaped by lessons from Ukraine, are: artillery and precision munitions stocks (depleted by Ukraine aid), air defence systems (demonstrated to be critical by Ukrainian experience), armoured vehicle modernisation, and long-range precision strike capabilities. Electronic warfare, drone defence, and satellite communications are also major investment areas.

Sources

• SIPRI Military Expenditure Database
• SIPRI Fact Sheet: World Military Expenditure 2024, April 2025
• SIPRI Press Release: Unprecedented Rise in Global Military Expenditure, 2025
• NATO, Defence Expenditure of NATO Countries 2014–2024, June 2024

The Takeaway

The 2024–2025 ranking of the world's biggest defence budgets reflects a world in the middle of a structural rearmament cycle with no clear endpoint. The United States remains in a class of its own, but China is closing the gap faster than any historical precedent suggests is comfortable. Europe is spending more than it has in a generation — not from ambition, but from the recognition that the post-Cold War security architecture it relied on has fractured. Countries on the front lines of conflict — Ukraine, Israel, Poland — are pushing spending to proportions of national income not seen since the major wars of the twentieth century. The arms race dynamic is self-reinforcing: when one major power increases spending, rivals feel compelled to respond, and without functional arms control agreements to cap this dynamic, the trajectory is upward for the foreseeable future.

Related Reading

• Countries That Export the Most Weapons (2025)
• Countries With the Largest Armies in the World (2025)
• Countries With the Strongest Air Forces in the World (2025)
• Countries With the Most Tanks in the World (2025)
• Countries With the Most Submarines in the World (2025)