Highest Military Spending Countries 2026: Global Defence Budgets

Global defence spending reached $2.63 trillion in 2025, the highest level in modern history. The United States accounts for approximately 33% of all global military spending with its FY2026 NDAA authorising $900.6 billion. China is second at $245 billion. Europe overtook East Asia as the second-highest spending region for the first time since the Cold War. NATO agreed a new 5% of GDP target. Poland leads at 4% of GDP. Ukraine spends 34% of GDP. This is the complete 2026 data guide to global defence budgets, sourced from IISS, SIPRI, US Senate Appropriations, Forecast International and official government publications.

Global Defence Spending in 2026: A Historic Level

Global defence spending reached $2.63 trillion in 2025, up from $2.48 trillion in 2024, an increase of 6% in current dollar terms and 2.5% in real terms, according to the IISS Military Balance 2026 published in February 2026. This is the highest level of global military spending in modern history. The 2024 growth rate of 9.4% in real terms was already described by SIPRI as the highest year-on-year increase since the end of the Cold War. The two consecutive years of record increases reflect a world where major conflicts are ongoing (Russia-Ukraine, Israel-Gaza, Iran-US-Israel), where China's military modernisation is accelerating, and where Western democracies have fundamentally revised their threat assessments following Russia's 2022 invasion of Ukraine.

The United States remains in a category of its own. As Wikipedia's list of countries by military expenditure documents, the US FY2026 NDAA authorised $900.6 billion in defence spending, approximately $8 billion more than requested. When nuclear weapons activities, veterans affairs, intelligence and other national security spending are added, the full US national security budget exceeds $1 trillion. American military spending alone exceeds the combined spending of the next nine highest-spending countries on earth. NATO members collectively accounted for 55% of total global military expenditures in 2024 according to SIPRI, meaning the Western alliance dominates global military spending by a factor of roughly 5 to 1 over China and Russia combined.

Top 15 Countries by Military Spending: 2025

Military Spending as a Percentage of GDP

Total dollar spending tells one story. Spending as a share of GDP tells another: how much of a country's economic output is dedicated to its military. Ukraine, with its economy under wartime conditions, spends approximately 34% of GDP on defence, an extraordinary figure only previously seen in countries like North Korea in peacetime. Russia at 6.8% and Saudi Arabia at 5.6% follow, reflecting wartime economy and Gulf security competition respectively. Among NATO members, Poland leads at 4%, with Latvia, Lithuania and the United States above 3%.

The United States: $900 Billion and the World's Largest Military

The US FY2026 National Defense Authorization Act, signed into law by President Trump on December 18, 2025, authorises $900.6 billion in defence spending, approximately $8 billion more than the White House requested. The Senate passed the bill 77-20, a bipartisan supermajority reflecting the rare consensus on defence spending in a polarised Congress. The discretionary defence appropriation is $838.5 billion, with additional mandatory spending and reconciliation act defence allocations pushing the total higher. The full national security budget including nuclear weapons activities (Department of Energy), veterans affairs, intelligence activities (CIA, NSA, NRO) and other security-related spending exceeds $1 trillion.

China: $245 Billion and Rising

China's official defence budget grew 7.2% in 2025 to approximately $245 billion according to Forecast International, in line with the People's Liberation Army's pattern of annual increases roughly matching or slightly exceeding GDP growth. China is the world's second-largest defence spender in absolute terms but remains at approximately 1.7% of GDP, well below the United States at 3.4%. The gap in absolute terms is vast: US defence spending is approximately 3.5 times China's official figure. However, China's actual military spending may be materially higher than the official figure, as PLA budget transparency does not match Western standards and several categories of spending (strategic rocket forces, paramilitary police, military research and development, state-owned defence industry subsidies) may be partially excluded from the official headline number.

Russia: Wartime Economy at $157 Billion

Russia's defence spending reached approximately $157 billion in 2025, the highest level since the Soviet era and representing approximately 6.8% of GDP, according to Forecast International and SIPRI estimates. Russia has fundamentally shifted to a wartime economic structure since its full-scale invasion of Ukraine in February 2022, with defence and security spending accounting for approximately 40% of Russia's total federal budget in 2025. The surge reflects not only the ongoing war in Ukraine but also the restructuring of the Russian defence industrial base to sustain attrition warfare, including expanded ammunition production, drone procurement, and reconstitution of armoured vehicle losses. Russia's defence spending in dollar terms has tripled since 2014. In ruble terms, the real increase is even larger.

Europe and NATO: The Biggest Strategic Shift in a Generation

The Middle East: Iran War Accelerates an Arms Race

The Middle East was the fastest-growing defence-spending region in 2025 even before the Iran conflict began in early 2026. Saudi Arabia's defence budget reached approximately $72-78 billion, expanded procurement for air-defence and precision-strike capabilities, and represents approximately 5.6% of GDP. Israel at $37 billion and 5.3% of GDP reflects the sustained security demands of the Gaza operation and the deterrence posture against Iran. The Iran war in 2026 has created a new phase of regional arms competition: every Gulf state is accelerating air-defence procurement, drone acquisition and missile defence investments.

The Indo-Pacific: Japan, India and Australia Accelerate

Japan's defence budget reached approximately $55-58 billion in 2025, part of Prime Minister Kishida's five-year plan to double Japanese defence spending by 2027 (to approximately 2% of GDP from the long-standing 1% cap). Japan is acquiring Tomahawk cruise missiles, extending the range of its self-defence forces and investing heavily in cyber and space capabilities. Australia at $34 billion is accelerating long-range-strike and submarine programmes under the AUKUS agreement, designed to counter China's maritime assertiveness in the Indo-Pacific. The SIPRI Trends in World Military Expenditure 2024 fact sheet, published April 28, 2025, describes the overall pattern as an "unprecedented rise" driven by Europe and the Middle East, with Asia-Pacific countries also sustaining multi-year increases. India at $60 billion is growing its defence budget by approximately 5-8% annually and is one of the world's largest defence importers converting toward domestic production.

The Global Trend: $2.63 Trillion and Rising

Global Military Spending: Complete Data Table 2025

Outlook: $2.75 Trillion and the 5% NATO Target

Frequently Asked Questions

What Comes Next?

The trajectory of global defence spending is clear: upward, structurally, for at least the next decade. The three simultaneous drivers that produced the 2024-2025 record increases (Russia's war in Ukraine, China's military modernisation, the Iran conflict and its aftermath) show no sign of reversing. NATO's 5% of GDP target by 2035 would, if achieved, require European members to collectively double their defence budgets over the next decade, adding roughly $500-700 billion in additional annual Western defence spending to a baseline that is already at historical highs. The geopolitical conditions that kept military spending suppressed in the 1990s and 2000s, characterised by US unipolarity and a rules-based international order, have not returned and are unlikely to return in the near term.

The Iran war has added one more dimension to an already complex picture. Gulf states are accelerating air-defence procurement. Israel is sustaining elevated spending levels. Iran's military capacity has been reduced but not eliminated. Every country in the region is reassessing its deterrence posture. At the global level, the IISS Military Balance 2026 assesses the defining feature of the current era as a three-way great-powers modernisation race between the US, China and Russia simultaneously investing in the same technologies: hypersonics, AI-enabled autonomy, space and directed energy. The outcome of that competition will determine the military balance of power for the next generation. The world is paying for that competition at a cost of $2.63 trillion per year, and rising.