Ukraine war, tensions in East Asia drive increased military spending

World military spending grew for the eighth consecutive year in 2022 to touch an all-time high of $2240 billion. By far the sharpest rise in spending (+13 per cent) was seen in Europe and was largely accounted for by Russian and Ukrainian spending. However, military aid to Ukraine and concerns about a heightened threat from Russia strongly influenced many other states’ spending decisions, as did tensions in East Asia. The invasion of Ukraine had an immediate impact on military spending decisions in central and western Europe. This included multi-year plans to boost spending from several governments. Their military expenditure is expected to rise further in the years ahead. Several states significantly increased their military spending following Russia’s invasion of Ukraine in February 2022, while others announced plans to raise spending levels over periods of up to a decade.

Today, concerns about Russian aggression have been building for much longer. Some of the sharpest increases were seen in Finland (+36 per cent), Lithuania (+27 per cent), Sweden (+12 per cent) and Poland (+11 per cent). Ukraine’s military spending reached $44.0 billion in 2022. At 640 per cent, this was the highest single-year increase in a country’s military expenditure ever recorded in SIPRI data. As a result of the increase and the war-related damage to Ukraine’s economy, the military burden (military spending as a share of GDP) shot up to 34 per cent of GDP in 2022, from 3.2 per cent in 2021. Figures released by Russia in late 2022 show that spending on national defence, the largest component of the country’s military expenditure, was already 34 per cent higher, in nominal terms, than in budgetary plans drawn up in 2021.

The United States remains by far the world’s biggest military spender. US military spending reached $877 billion in 2022, which was 39 per cent of total global military spending and three times more than the amount spent by China, the world’s second largest spender.

US financial military aid to Ukraine totalled $19.9 billion in 2022. Although this was the largest amount of military aid given by any country to a single beneficiary in any one year since the cold war, it represented only 2.3 per cent of total US military spending. China allocated an estimated $292 billion, which was 4.2 per cent more than in 2021 and 63 per cent more than in 2013. China’s military expenditure has been increasing for the last 28 consecutive years. Japan’s military spending increased by 5.9 per cent between 2021 and 2022, reaching $46.0 billion, or 1.1 per cent of GDP. This was the highest level of Japanese military spending since 1960. A new national security strategy published in 2022 sets out ambitious plans to increase Japan’s military capability over the coming decade in response to perceived threats from China, North Korea and Russia. The combined military expenditure of countries in Asia and Oceania was $575 billion. This was 2.7 per cent more than in 2021 and 45 per cent more than in 2013, continuing an uninterrupted upward trend dating back to at least 1989.