A surge in global military spending, particularly among NATO allies in Europe, points to a growing sense of unease among nations. According to a report by the Stockholm International Peace Research Institute (SIPRI), 102 out of 173 countries increased their defense budgets in 2023, leading to a 6.8% rise in global military spending – the largest year-on-year increase since 2009. This trend is particularly pronounced within NATO, where members excluding the United States increased their spending by a staggering $68 billion (19%) between 2022 and 2023. The addition of Finland and Sweden to the alliance further boosted NATO’s annual spending by $16 billion.
While raw dollar figures can be misleading due to variations in cost of living and wages, SIPRI has adjusted its estimates for military purchasing-power parity (PPP), making defense budgets more comparable across countries. This adjusted data reveals that, despite a slightly slower growth rate in nominal terms, Ukraine’s budget increases will have a greater impact than Russia’s. Similarly, the spending by America’s allies in NATO carries more weight than initially suggested by dollar figures alone.
Despite these increases, the United States remains the world’s largest military spender, allocating $916 billion to its armed forces in 2023. Combined, the 31 NATO allies spent $434 billion, or $719 billion when adjusted for cost differences, placing them second in the global rankings. While NATO’s armed forces are not unified, comparing its spending to other major powers like Russia and China provides valuable insights. In 2023, Russia and China spent just 8% and 22% respectively of NATO’s total, but when adjusted for PPP, their spending reaches 24% and 32% of NATO’s outlay.
Despite their significant contributions, NATO allies still have room for improvement. NATO Secretary-General Jens Stoltenberg recently stated that only 18 members will meet the alliance’s target of spending at least 2% of their GDP on defense this year. This number is an improvement from the 11 members who met the target in 2023, but highlights the need for further commitment from member nations.
It’s important to acknowledge that budget calculations can vary across countries and not all governments report their military spending accurately. However, these budgets offer a valuable glimpse into a nation’s military trajectory, shaping their future capabilities and intentions.
