Key points
- In 2024, global defence spending reached USD2.46 trillion
- Increases were ignited by worsening security environments
- European defence spending surged by 11.7pc
ISLAMABAD: Global defence spending, in response to increasing threat perceptions, rose to USD2.46 trillion in 2024.
States in Asia, the Middle East North Africa, and Europe experienced big budget increases, though President Trump’s recent call for a minimum spend of 5 per cent of GDP among NATO members remains impractical for most countries, according to the International Institute for Strategic Studies.
Global defence spending, in 2024, showed increasing security challenges and reached USD2.46 trillion, up from USD2.24trn the previous year.
Growth also enhanced, with the 7.4 per cent real-terms uplift surpassing increases of 6.5 per cent in 2023 and 3.5 per cent in 2022.
As a result, in 2024, global defence spending reached an average of 1.9 per cent of GDP, up from 1.6 per cent in 2022 and 1.8 per cent in 2023.
Worsening security environments
Increases were ignited by worsening security environments and surging threat perceptions, particularly in Europe the Middle East and North Africa (MENA), which both saw major increases, as did some important Asian countries.
Moreover, easing inflation helped many countries to invest in new capabilities rather than just covering larger operating costs and wages. The only region that did not see real-term increases was Sub-Saharan Africa. Here, defence spending declined by 3.7 per cent.
European defence spending surged by 11.7 per cent to reach USD457 billion, with 2024 making the tenth consecutive year of growth.
Russia’s 2014 takeover of Crimea raised threat perceptions on the continent and rejuvenated long-standing commitments from NATO members to spend 2 per cent of GDP on defence.
Regional growth in 2024 was overshadowed by the 23.2 per cent increase in the German defence budget; however, future defence budget growth is unsure after the collapse of the ruling ‘traffic light’ coalition in November 2024 and the upcoming election.
Largest defence spender
In other countries, defence budgets, also grew significantly, like in Poland, which became the 15th largest defence spender globally in 2024, up from 20th place in 2022.
Russian spending in 2024 reflected the equivalent of 6.7 per cent of GDP – more than double the levels in the years before its 2022 full-scale invasion of Ukraine.
Such spending and associated fiscal pressures are likely to continue into 2025, with identifiable defence spending projected to reach 7.5 per cent of GDP.
Asian defence budgets continued to increase at a moderate pace in 2024, in line with their trajectory over the last decade.
This continuity comes as strategic drivers – like China’s military modernisation, and North Korea’s developing nuclear weapons programme – increase threat perceptions in the region.
China’s defence budget
China’s defence budget rose by 7.4 per cent in real terms, surpassing the 3.9 per cent average rate for the rest of the region in spite of significant uplifts in Japan and Indonesia.
The invasion of Gaza and larger regional instability also led to an increase in defence spending as a percentage of GDP, with the regional average rising to 4.3 per cent in 2024, up from 4.0 per cent in 2023.
This average masks the fact that the region is home to some of the largest spenders as a proportion of GDP. This includes Algeria, which now spends 8.2 per cent of GDP on defence – second only to Ukraine globally and Israel which spends 6.4 per cent.
In Latin America and the Caribbean, defence spending reached USD59.5bn, reflecting a real-term increase of 4.1 per cent.
Despite this uplift, regional budgets are yet to recover from COVID-19 pandemic-related cuts, with growth remaining subdued against hovering financial pressures and low-risk perceptions.
