Geopolitics · Issue 01
The rearmament decade
World military spending hit $2.89 trillion in 2025. America spent less. Europe and Asia spent enough more to keep the global total rising.
- 01United States−7.5% real95433%
- 02China+7.4%33612%
- 03Russia+5.9% · 7.5% of GDP1906.6%
- 04Germany2.3% of GDP1143.9%
- 05India+8.9%92.13.2%
- 06United Kingdom−2.0%893.1%
- 07Ukraine40% of GDP84.12.9%
- 08Saudi Arabia+1.4%83.22.9%
- 09France+1.5%682.4%
- 10Japan1.4% of GDP62.22.2%
- 11Israel7.8% of GDP48.31.7%
- 12Poland4.5% of GDP46.81.6%
- World military expenditure, 2025
- $2.89 tn
- Europe, 2025
- +14%
- United States (still #1, down 7.5%)
- $954 bn
- Global military burden, share of GDP
- 2.5%
An 11-year rise with a new composition
SIPRI’s April 2026 fact sheet is the cleanest official picture we have: $2,887 billion in 2025, up 2.9% in real terms, the eleventh straight annual increase and 41% above 2016. The global military burden ticked up to 2.5% of world GDP, the highest since 2009. The surprise inside the total is the United States. US outlays fell 7.5% to $954 billion, mainly because no new military aid for Ukraine was approved in the year. Outside America, spending rose 9.2%. Europe jumped 14% to $864 billion. Asia-Pacific rose 8.1% to $681 billion, the fastest since 2009. The unipolar spender is still first. The growth is everywhere else.
Europe is rearming faster than at any time since 1953
That is SIPRI’s phrasing for European NATO, not ours. Twenty-two of 29 European NATO members are now at or above 2% of GDP. Germany’s $114 billion puts it fourth in the world. Poland at 4.5% of GDP is a front-line budget, not a peace dividend leftover. Ukraine spent $84.1 billion — 40% of GDP — which is not a ‘defence industry story’ so much as a wartime fiscal state. The long view is a European industrial base that has to learn how to make shells, air defence and drones at volume after thirty years of doing the opposite.
Asia is a modernization, not a spike
China’s $336 billion is the 31st consecutive increase, up 7.4%. SIPRI flags that an anti-corruption campaign in procurement does not appear to have capped the total. Japan is still only 1.4% of GDP, but the direction of travel — missiles, strike, longer-range — is a break with the post-1945 settlement. India, at $92.1 billion and +8.9%, is buying for two borders. These are not 2022-style shocks. They are decade-scale force design.
What investors keep getting wrong
Defence is cyclical in procurement and structural in politics. A 2.9% global rise looks tame next to 2024’s 9.7% leap; it is still a world that has chosen guns over the 1990s baseline. The investable layer is munitions, sensors, air defence, secure comms and shipyards with actual slots — not every logo that put ‘AI’ on a pitch deck after 2022. The risk layer is that budgets authorised in panic are stretched over delivery schedules that slip.
Investing lens
Horizon 5–10 years · Educational, not advice
European and East Asian rearmament is a multi-year order book, not a one-budget event. Prefer names with contracted munitions, air-defence, and naval capacity over pure multiple expansion on ‘geopolitical premium’.
Where the map points
- European primes with visible artillery, missile and air-defence backlog
- C4ISR, electronic warfare and dual-use space/comms
- Shipbuilding and submarine supply chains with constrained dry-dock capacity
- Select cyber and drone suppliers that have already passed from prototype to inventory
What can break it
- Aid and budget politics can reverse a single year, as the 2025 US print shows
- Industrial bottlenecks delay revenue even when appropriations pass
- Export controls and ethics screens limit the holder base
CHART does not recommend securities, funds or trades. Figures can be revised by their publishers. Do your own research and consider regulated advice before allocating capital.
Sources
Every headline number traces to a named publisher. Contextual sources inform the essay, not the key stat.
- 01PrimarySIPRI2026-04Trends in World Military Expenditure, 2025
World military spending $2,887 billion in 2025, +2.9% real, 11th consecutive rise.
- 02CorroboratedSIPRI2026-04-27Global military spending rise continues as European and Asian expenditures surge
US $954bn; China $336bn; Russia $190bn; Europe $864bn (+14%).
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