New Delhi: Defence spending is on the rise in Europe, representing more than a fifth of all defence spending globally in 2025, driven primarily by big investments from Germany, according to a new report from The International Institute for Strategic Studies (IISS).
“IISS analysis shows that Europe accounted for over 21 percent of the global total in 2025 up from 17 percent in 2022. Spending in Europe increased by almost 13 percent in real terms in 2024 and in 2025 notably, Germany accounted for a quarter of this uplift, cementing its rank as the fourth largest defence spender globally,” Bastian Giegerich, director of Defence and Military Analysis at IISS, said with the release of the think tanks annual Military Balance report.
The report said that overall international defence spending increased to $2.63 trillion in 2025 from $2.48 trillion in 2024.
IISS said in the report, which was published on the fourth anniversary of Russia’s invasion of Ukraine, that Europe’s push continues to be prompted by two factors: the continent’s “response to Russian aggression” and “reduced US willingness to underwrite regional security.”
As for Berlin, Bastian pointed out that in 2025, “German defence spending passed the $100 billion mark at $107 billion up from $86 billion in 2024. European NATO members spent on average 2.16 percent of GDP on defence.”
He added that further growth in defence expenditure in Europe “will depend on sustained political and public support amid significant fiscal pressures.”
Last year NATO members pledged to spend some 5 percent of GDP on defence, split between 3.5 percent on “core” defence capabilities and another 1.5 percent on national security-related capabilities. Bastian said that some “fiscally constrained allies will struggle to meet the new target of 3.5 percent of GDP for core defence capabilities by 2035. In contrast, Germany, for instance, which was spending under 2 percent of GDP as recently as 2024 has already announced plans to reach the targets as soon as 2029.”
“The IISS assesses that Russia spent $186 billion on defence in 2025 the equivalent of 7.3 percent of its GDP, and up from 6.7 percent in the previous year, while its military expenditure increased by just 3 percent in real terms compared with the 56.9 percent in 2024. This could be largely the effect of financial reforms and efficiency measures in the Ministry of Defence,” Bastian said in the launch event.
