World’s military spending reaches unprecedented $2 trillion

Russia inflated its military budget in 2021, in run-up to Ukraine invasion, by 2.9%

The world’s military expenditure has hit unprecedented levels, surpassing $2 trillion for the first time in 2021, according to a new study.

Researchers from the Stockholm International Peace Research Institute (Sipri) predict that last year’s total global military spend of $2.1 trillion will only be beaten this year, given the security situation in Europe after Russia’s invasion of Ukraine.

The top countries that boosted their military arsenal in 2021 were the US, China, India, the UK and Russia, together accounting for 62 per cent of total expenditure, according to the study.

Despite the economic fallout of the Covid-19 pandemic around the world, global military expenditure by governments rose by 0.7 per cent last year, it said.

“In 2021 military spending rose for the seventh consecutive time to reach US$2.1 trillion. That is the highest figure we have ever had,” said Diego Lopes da Silva, senior researcher at Sipri.

Though the US outspent all other nations with $801bn, it actually recorded a decline of 1.4 per cent from its 2020 expenditure.

US funding for military research and development rose by 24 per cent between 2012 and 2021, while procurements of arms fell by 6.4 per cent during the same period. Both declined year-on-year in 2021.

“The increase in R&D spending over the decade 2012–21 suggests that the United States is focusing more on next-generation technologies,” said Alexandra Marksteiner, researcher with Sipri’s Military Expenditure and Arms Production Programme. “The US government has repeatedly stressed the need to preserve the US military’s technological edge over strategic competitors.”

China became the world’s second-largest spender, marking an increase of 4.7 per cent in 2021 from the previous year. Growing its military prowess for 27 consecutive years, China injected an estimated $293bn into its military in 2021.

Sipri senior researcher Dr Nan Tia said that China’s “growing assertiveness” in and around the South and East China Seas have become a “major driver of military spending in countries such as Australia and Japan”.

“An example is the AUKUS trilateral security agreement between Australia, the United Kingdom and the United States that foresees the supply of eight nuclear-powered submarines to Australia at an estimated cost of up to $128bn,” the researcher said.

India, the third-highest military spender, recorded $76.6bn in expenditure on its military as it countered the threat of enchroachments by the Chinese military on its eastern border. India’s spending rose by 0.9 per cent from 2020 and by 33 per cent from 2012.

The UK marked an increase of 3 per cent in military spending to $68.4bn, taking the fourth spot. It replaced Saudi Arabia, which instead decreased spending by 17 per cent.

Russia, which launched its offensive on Ukraine on 24 Februrary, increased its military expenditure by 2.9 per cent in the run-up to the war. In 2021, Moscow spent $65.9bn to boost its military power at a time when it built up its forces along the Ukrainian border.

High oil and gas revenues helped Russia boost its military spending in 2021, Lucie Béraud-Sudreau, director of Sipri’s military expenditure programme said.

“Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014,” he said.

Meanwhile, Ukraine’s expenditure declined to $5.9bn, but still accounted for 3.2 per cent of the country’s GDP.

As Russia’s invasion of Ukraine has increased tensions in Europe, more Nato countries have stepped up spending, including Germany, which is the third largest spender in central and western Europe. Mr Lopes da Silva said that analysts expected spending in Europe to continue to grow.