Worldwide military outlays ascended to $2.63 trillion by 2025, indicating an annual rise of 2.5 percent. This increase was consistently propelled by heightened competition among major global powers and persistent national security concerns, as detailed in the most recent edition of The Military Balance, a publication from the International Institute for Strategic Studies (IISS).
Within its 67th yearly evaluation, the London-based research institute observed a swift transformation in military trends. This evolution is partly attributable to a policy alteration in the United States, occurring during President Donald Trump’s second term. The publication further specifies that US defense strategy has distinctly reoriented towards territorial protection and shared responsibilities, introducing plans for a multi-tiered “Golden Dome” missile defense system.
The IISS observes that immediate American aid to Ukraine has been scaled back, concurrently with United States troops encountering multiple strains across the Caribbean, Indo-Pacific, and Middle East.
Four years following Russia’s comprehensive incursion into Ukraine, Moscow’s modest territorial acquisitions have incurred what the publication describes as a steep price. Despite considerable attrition, Russia has nonetheless adapted and revitalized its forces, sustaining its overall operational capability. Observable Russian military expenditure climbed by 3 percent in real terms in 2025, a moderation compared to preceding years, but still representing 7.3 percent of its GDP. In absolute figures, defense outlays are now nearly three times their 2021 level.
Europe’s proportion of global defense outlays has ascended to 21 percent, an increase from 17 percent in 2022. Germany’s expenditure rise constitutes approximately one-fourth of European growth since 2024, complemented by additional significant increases observed in Belgium, the Nordic nations, and Spain. However, the IISS warns that acquisition process overhauls across the continent remain sluggish and insufficiently innovative. Moreover, industrial capacity constraints continue to impede rearmament and endeavors to bolster air and missile defense.
Across Asia, the expansion of Chinese defense outlays consistently surpasses that of its neighboring countries. Beijing’s proportion of regional military expenditure has climbed to almost 44 percent in 2025, contrasting with a mean of 37 percent between 2010 and 2020. Despite a recent cleansing within the People’s Liberation Army’s command structure, the IISS perceives scant proof of a corresponding decline in its operational capacity.
China has maintained consistent military coercion in the vicinity of Taiwan and has proceeded with its maritime growth. The PLA Navy has inaugurated the aircraft carrier Fujian and at least nine new major surface combatants. Additionally, ten new nuclear-powered submarines were deployed between 2021 and 2025. This development, as per the report, surpassed the US Navy within the identical timeframe concerning both hull numbers and total tonnage.
Defense outlays in the Middle East and North Africa amounted to $219 billion, with nations typically dedicating 4.3 percent of their GDP to security. The IISS observes fortified US defense partnerships with Gulf states, such as Qatar, Saudi Arabia, and the United Arab Emirates.