World military spending: increases in the US and Europe, decreases in oil exporting countries

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Total world military expenditure rose to $1 686 billion in 2016, an increase of 0.4% in real terms from 2015, according to new figures released by the Stockholm International Peace Research Institute (SIPRI) this week.

Military spending in North America saw its first annual increase since 2010, while spending in Western Europe grew for the second consecutive year.

World military expenditure rose for a second consecutive year to a total of $1 686 billion in 2016 — the first consecutive annual increase since 2011 when spending reached a peak of $1 699 billion.

Trends and patterns in military expenditure vary considerably between regions, SIPRI noted. Spending continued to grow in Asia and Oceania, Central and Eastern Europe and North Africa. By contrast, spending dropped in Central America and the Caribbean, the Middle East (based on countries for which data is available), South America and sub-Saharan Africa.

The United States remains the country with the highest annual military expenditure in the world. US military spending grew by 1.7% between 2015 and 2016 to $611 billion. Military expenditure by China, the second largest spender in 2016, increased by 5.4% to $215 billion, a lower rate of growth than in previous years. Russia increased its spending by 5.9% in 2016 to $69.2 billion, making it the third largest spender. Saudi Arabia was the third largest spender in 2015 but dropped to fourth in 2016. Spending by Saudi Arabia fell by 30% in 2016 to $63.7 billion, despite the country’s continued involvement in regional wars. India’s military expenditure grew by 8.5% in 2016 to $55.9 billion, making it the fifth largest spender.

The growth in US military expenditure in 2016 may signal the end of a trend of decreases in spending, resulting from the economic crisis and withdrawal of US troops from Afghanistan and Iraq. US spending in 2016 remained 20% lower than its 2010 peak.
“Despite continuing legal restraints on the overall US budget, increases in military spending were agreed upon by Congress,” Dr Aude Fleurant, Director of the SIPRI Arms and Military Expenditure (AMEX) programme, said. “Future spending patterns remain uncertain due to the changing political situation in the USA.”

Military expenditure in Western Europe rose for the second consecutive year and was up by 2.6% in 2016. There were spending increases in all but three countries in Western Europe. Italy recorded the most notable increase, with spending rising by 11% between 2015 and 2016.

The countries with the largest relative increases in military spending between 2015 and 2016 are in Central Europe. Overall spending in Central Europe grew by 2.4% in 2016.
“The growth in spending by many countries in Central Europe can be partly attributed to the perception of Russia posing a greater threat,” Siemon Wezeman, senior researcher with the SIPRI AMEX programme, said. “This is despite the fact that Russia’s spending in 2016 was only 27% of the combined total of European NATO members.”
“Falling oil revenue and associated economic problems attached to the oil-price shock forced many oil exporting countries to reduce military spending. For example, between 2015 and 2016 Saudi Arabia had the biggest absolute decrease in spending of $25.8 billion,” Dr Nan Tian, SIPRI AMEX programme researcher, said.

The largest cuts in military expenditure in 2016 related to falling national oil revenues were in Venezuela (–56%), South Sudan (–54%), Azerbaijan (–36%), Iraq (–36%) and Saudi Arabia (–30%). Other notable decreases were seen in Angola, Ecuador, Kazakhstan, Mexico, Oman and Peru.



Only two of the 15 countries with the largest falls in spending in 2016 are not oil exporters. However, a minority of oil-exporting countries, such as Algeria, Iran, Kuwait and Norway, are better equipped economically to deal with oil-price shocks and could continue with existing spending plans in 2016.