Global military expenditures rose to $2.63 trillion in 2025, marking an increase of 2.5% in real terms compared to 2024, despite a slight decline in U.S. defense spending. This surge represents the highest level of military spending since World War II, largely fueled by increased investments by European nations, which saw a record 12.7% uptick in military spending. The data, presented in the 67th Military Balance report published by the International Institute for Strategic Studies (IISS), illustrates the changing dynamics in defense budgeting amid ongoing geopolitical tensions.

The spike in military spending in Europe has been significantly influenced by the actions of two prominent leaders: Russian President Vladimir Putin and former U.S. President Donald Trump. Since Russia's annexation of Crimea in 2014, European nations have been reevaluating their defense strategies, but the urgency for increased military readiness soared following Russia's full-scale invasion of Ukraine. This development marks a pivotal moment for European security policy, pushing many countries to enhance their military capabilities amid fears of further aggression.

The implications of this military spending increase are critical, reflecting not only a shift in European defense postures but also a broader global context of rising tensions and strategic rivalries. As nations allocate larger portions of their budgets to military expenditure, the potential for conflict may rise, raising concerns about long-term security and stability in the region. The report's findings suggest a growing trend that could shape international relations for years to come, particularly in the context of NATO and global security collaborations.