IISS reports global defence spending reached $2.63trn in 2025, up 2.5% in real terms. While US and Russian growth moderated, Europe recorded a 12.6% real-terms increase, driven largely by Germany and reinforced by NATO’s 5% of GDP pledge. European spending now exceeds 21% of the global total, marking a sustained rearmament trend rather than a temporary surge. In Asia, expenditure rose 5.7%, with China accounting for nearly 44% of regional spending, prompting countervailing increases among US-aligned states. The Middle East and North Africa saw continued growth amid regional instability, while Sub-Saharan Africa posted its sharpest rise in over a decade. Overall, heightened geopolitical risk and fiscal adaptations suggest elevated defence outlays will persist into 2026.
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IISS reports global defence spending reached $2.63trn in 2025, up 2.5% in real terms. While US and Russian growth moderated, Europe recorded a 12.6% real-terms increase, driven largely by Germany and reinforced by NATO’s 5% of GDP pledge. European spending now exceeds 21% of the global total, marking a sustained rearmament trend rather than a temporary surge. In Asia, expenditure rose 5.7%, with China accounting for nearly 44% of regional spending, prompting countervailing increases among US-aligned states. The Middle East and North Africa saw continued growth amid regional instability, while Sub-Saharan Africa posted its sharpest rise in over a decade. Overall, heightened geopolitical risk and fiscal adaptations suggest elevated defence outlays will persist into 2026.