Defence spending in western and central Europe has surpassed that of the last year of the cold war, an annual report has found, as military expenditure across the world hit an all-time high of $2.24tn (£1.8tn) last year.
The outbreak of war in Ukraine has triggered the steepest increase in military expenditure in Europe in three decades, according to the Stockholm International Peace Institute (Sipri).
The thinktank reports that spending by central and western European states reached $345bn in 2022, a sum that in real terms surpasses that of 1989, the last year of the cold war. Their defence expenditure is 30% higher than a decade ago.
Germany was among the nations breaking with the norms of the recent past. The Zeitenwende or turning point that the country’s chancellor, Olaf Scholz, announced last year ushered in its biggest rearmament since the second world war.
Germany’s military budget was the seventh largest in the world last year behind the US, China, Russia, India, Saudi Arabia and the UK, and further huge increases in expenditure are planned.
The country established an extra-budgetary fund of $105bn last year, which will be used from 2023 to increase its armed forces’ military capabilities.
France, South Korea and Japan occupy the other three spots in the world’s top 10 biggest defence spenders.
The UK had the highest military spending in central and western Europe at $68.5bn, of which an estimated $2.5bn, or 3.6%, was financial aid to Ukraine.
Europe as a whole, including Russia and Ukraine, increased its expenditure by 13% year on year, in what the Sipri report describes as “the largest annual increase in total European spending in the post-cold war era”.
Russia’s military spending grew by an estimated 9.2% to about $86.4bn, equivalent to 4.1% of the country’s GDP in 2022, up from 3.7% in 2021.
Ukraine was the world’s 11th biggest defence spender after a 640% increase in its military expenditure. Its military burden was by far the largest of any country at 34% of GDP.
Some of the other sharpest year-on-year increases in expenditure were in Finland, up 36%, Lithuania 27%, Sweden 12% and Poland 11%.
Dr Diego Lopes da Silva, a senior researcher with Sipri’s military expenditure and arms production programme, said 2022 was likely to prove to be just the start of mass rearmament.
“The invasion of Ukraine had an immediate impact on military spending decisions in central and western Europe,” he said. “This included multi-year plans to boost spending from several governments.
“As a result, we can reasonably expect military expenditure in central and western Europe to keep rising in the years ahead.”
Vladimir Putin’s invasion of Ukraine on 24 February last was a “major driver” of global spending on arms, but expenditure has also generally been rising around the world over the last two decades.
Nato members pledged in 2014 to move towards spending 2% of GDP on defence by 2024 and the Sipri report suggests that global military spending grew for the eighth consecutive year in 2022.
The US remains by far the world’s biggest military spender at $877bn, accounting for 39% of the global total.
China, whose military expenditure has increased for 28 consecutive years, is the world’s second-largest defence spender, allocating an estimated $292bn in 2022 – 4.2% more than in 2021 and 63% more than in 2013.
India was the fourth largest spender behind Russia at $81.4bn, 6% more than in 2021 and 47% more than in 2013, a reflection of continuing border tensions with both China and Pakistan.
Upgrades for the armed forces’ equipment and military infrastructure along its disputed border with China accounted for 23% of the total.
Saudi Arabia’s military expenditure reached an estimated $75bn in 2022, up by 16% from 2021. It was the first annual increase since 2018 and reflects the kingdom’s leadership of a coalition of countries that has intervened in Yemen since 2015.
Saudi Arabia had the world’s second-highest military burden after Ukraine at 7.4% of GDP.
Dr Nan Tian, another senior researcher with Sipri’s military expenditure and arms production programme, said: “The continuous rise in global military expenditure in recent years is a sign that we are living in an increasingly insecure world.
“States are bolstering military strength in response to a deteriorating security environment, which they do not foresee improving in the near future.”
There were some more hopeful signs in Sipri’s report. Military spending by African countries was $39.4bn in 2022, the first fall since 2018. The regional total was 5.3% lower than in 2021 and 6.4% lower than in 2013.
