STOCKHOLM - World military expenditure is estimated to have been $1686 billion in 2016, equivalent to 2.2 per cent of the global gross domestic product (GDP) or $227 per person.1 The 2016 estimate is a marginal increase of about 0.4 per cent in real terms on 2015.2 After 13 consecutive years of increases (from 1998
to 2011), world military spending has continued to plateau—with only minor decreases between 2011 and 2014 (an average of 0.7 per cent per annum) and slight increases in 2015 and 2016.

In many oil-exporting countries, increases in military spending over the past 10 years have been correlated with high oil prices. The subsequent fall in the price of oil has led to substantial decreases in military spending. Since late 2014, the sharp fall in oil prices and the persistent price slump have had a significant impact on spending in several oil-exporting countries. The decline in oil revenue has forced many oil-exporting countries to cut their government budgets, including military spending. The falls in countries such as Angola, Ecuador, Iraq, Mexico, Saudi Arabia, South Sudan and Venezuela have aff ected the wider regional trends.

THE TOP 15 MILITARY SPENDERS IN 2016

The top 15 countries with the highest  military spending in 2016 were the same as those in 2015, although there were some changes in their ranking.

The 15 largest spenders account for $1360 billion, or 81 per cent, of total global spending. Between 2007 and 2016, China has seen the biggest growth in military spending, with an increase of 118 per cent, followed by Russia (87 per cent) and India (54 per cent). In the same period, Italy (–16 per cent), the United Kingdom (–12 per cent) and the United States (–4.8 per cent) were the only countries in the top 15 to see their military expenditure fall.

In 2016, total US military expenditure of $611 billion is over one-third (36 per cent) of world military expenditure. This is nearly three times the level of China’s spending, which is ranked second.

US military spending grew by 1.7 per cent between 2015 and 2016, the fi rst increase after fi ve consecutive years of decline. Despite this slight growth, US military spending remains 20 per cent lower than its peak in 2010. The small upturn in 2016 can be attributed to legisla tion adopted in 2013 and 2015, which eased the budget limits imposed in 2011. However, given the context of the presidential election and the inability of the US Congress and the White House to reach agreement on a budget to be implemented on 1 October 2016,  there is uncertainty about short-term developments in the country’s military expenditure.

As a result of an unexpected increase in Russia’s military expenditure in late 2016 and large cuts to Saudi Arabia’s military budget, Russia moved above Saudi Arabia to the position of third largest spender in 2016.

India moved from 7th to 5th place after its largest annual spending increase since 2009. Meanwhile, both the UK and Brazil dropped one place in the rankings.

The UK fell from 6th to 7th—a move largely attributed to the devaluation of the British pound following the result of a refer endum on the country’s membership of the European Union. In Brazil, which went from 12th to 13th position, failure to revitalize an economy deep in recession has seen the country’s military spending
decline by 7.2 per cent.


Regional trends

Military expenditure in North America saw its fi rst annual increase (1.7 per cent) since 2010. Central, Eastern and Western Europe also recorded annual increases of 2.4, 3.5 and 2.6 per cent, respectively.

Asia and Oceania’s spending rose by 4.6 per cent in 2016. By contrast, military spending fell in Central America and the Caribbean (–9.1 per cent), South America (–7.5 per cent), Africa (–1.3 per cent) and the total of countries in the Middle East for which data is available.