In this article, we will be covering the 20 countries with highest military spending in the world. If you want to skip our detailed analysis of the global defense market, you can go directly to 5 Countries With Highest Military Spending In The World.
Global Military Spending Reaches New Skies
The global arms race is gaining dangerous momentum, posing challenges to peace and stability around the world. Rising geopolitical tensions, national security concerns, technological advancements, and the development of new weapons systems are all key factors that have led to larger military budgets and increased focus on defense capabilities.
According to a report by the Stockholm International Peace Research Institute (SIPRI), total global military expenditure increased by 3.7% to reach a new record high of $2.24 trillion in 2022. Europe’s military expenditure skyrocketed in 2022, marking the steepest annual increase in at least 30 years.
The significant upsurge in global military spending means that the global defense industry is poised for growth. According to a report by MarketsandMarkets, the global defense market is estimated to have reached a value of over $2 trillion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 4.9% from 2024 to 2028 and reach above $2.54 trillion by the end of the forecasted period. The ongoing war in Ukraine and the escalating regional conflicts in the Middle East have served as stark reminders of the need for strong national defense. This is driving countries to increase their military spending and enhance their defense capabilities. To acquire the latest military technologies and maintain a competitive edge on the global stage, countries around the world are investing heavily in research and development as well as military modernization programs.
Key Players in the Global Defense Industry
Some of the biggest corporations in the defense industry that are expected to benefit from the growing military spending are Northrop Grumman Corporation (NYSE:NOC), L3Harris Technologies, Inc. (NYSE:LHX), and Lockheed Martin Corporation (NYSE:LMT).
Lockheed Martin Corporation (NYSE:LMT) is a leading global aerospace, arms, defense, and technology corporation that also leads the F-35 industry team. On October 17, Lockheed Martin Corporation (NYSE:LMT) reported strong earnings for the fiscal third quarter of 2023. The company reported earnings per share (EPS) of $6.77, surpassing EPS estimates by $0.13. Lockheed Martin Corporation (NYSE:LMT) reported a revenue of $16.88 billion and outperformed revenue estimates by $155.74 million.
Here are some comments from Lockheed Martin Corporation’s (NYSE:LMT) Q3 2023 earnings call:
“The superior technological capabilities of the F-35 continue to generate strong interest both domestically and internationally. In September, Denmark's first four locally based F-35 aircraft arrived on their home soil. Denmark's program of record calls for 27 F-35A aircraft. Also in September, the Czech Republic chose to become part of the global F-35 Lightning II program, and the U.S. State Department approved a possible $5 billion foreign military sale to South Korea for up to 25 F-35 Joint Strike Fighters. Earlier in the quarter, Israel announced that we'll buy an additional 25 F-35, which will add a third squadron and increased its F-35 fleet to 75 aircraft.”
L3Harris Technologies, Inc. (NYSE:LHX) is a global aerospace and defense technology corporation. On November 2, L3Harris Technologies, Inc. (NYSE:LHX) announced that it has secured an $80 million contract from the US Navy to continue developing advanced systems to modernize electronic warfare (EW) capabilities for the Navy’s F/A-18 fleet. Under the contract, L3Harris Technologies, Inc. (NYSE:LHX) will be developing a next-generation electronic warfare (EW) system to ensure that naval aviators and pilots stay ahead of emerging threats in the ever-evolving battlefield. For more than 60 years, L3Harris Technologies, Inc. (NYSE:LHX) has been providing innovative EW capabilities to the US Air Force as well as to other allied air services around the world.
Northrop Grumman Corporation (NYSE:NOC) is another major aerospace and defense technology company. As one of the largest weapons manufacturers and military technology providers in the world, Northrop Grumman Corporation (NYSE:NOC) is one of the most valuable defense companies in the world. On September 25, Northrop Grumman Corporation (NYSE:NOC) reported that it has been awarded a contract that is worth approximately $705 million by the US Air Force to deliver the Stand-in Attack Weapon (SiAW), an air-to-ground missile. During the next 3 years, Northrop Grumman Corporation (NYSE:NOC) will further develop the air-to-ground weapon, conduct platform integration, and complete the flight test program for rapid prototyping in preparation for rapid fielding.
Now that we have discussed what’s going on at some of the major defense corporations, let’s take a look at the 20 countries with highest military spending in the world.
20 Countries With Highest Military Spending In The World
A military personnel in gear next to a shoulder-fired launcher, representing the company's less-lethal defense technology.
Methodology
In this article, we have listed 20 countries with the highest military spending in the world. To rank the countries with the highest military budgets, we consulted the Stockholm International Peace Research Institute (SIPRI) - Military Expenditure Database. This database provided us with data on the annual military spending of countries in 2022. We then narrowed down our selection to rank the top 20 countries with highest military spending in the world, which are listed below in ascending order.
20 Countries With Highest Military Spending In The World
20. Qatar
Military Expenditure: $15.41 Billion
Qatar is a country in the Middle East that ranks among the top 20 countries with highest military spending in the world. The country has a land border with Saudi Arabia and spends heavily on its military and defense. In 2022, Qatar’s military spending reached $15.41 billion.
19. Netherlands
Military Expenditure: $15.61 Billion
The Netherlands, also referred to as Holland, is a country in northwestern Europe that shares a border with Germany and Belgium. It is a major exporter of arms. In 2022, the Netherlands’ military spending totaled $15.61 billion.
18. Poland
Military Expenditure: $16.57 Billion
Poland is a country in Central Europe that ranks among the top countries with highest military spending in the world. Poland also manufactures and exports arms and weapons. In 2022, Poland spent around $16.57 billion on military.
17. Brazil
Military Expenditure: $20.21 Billion
Brazil ranks among the world’s largest and most populated countries. Brazil has a substantial domestic arms industry, and is a major exporter of arms. In 2022, Brazil’s military expenditure reached around $20.21 billion.
16. Spain
Military Expenditure: $20.31 Billion
Spain is a country in Southwest Europe where the defense industry is a strategic sector that drives Spain’s technological and industrial base. Spain’s defense industry supplies military systems and materials required by the armed forces, and the country is also a major exporter of arms and weapons. In 2022, Spain’s military expenditure reached around $20.31 billion.
15. Israel
Military Expenditure: $23.41 Billion
Israel is a country in the Middle East that is home to a thriving defense sector. The Middle East's volatile security environment combined with Israel’s ongoing conflict with Hamas has led Israel to invest heavily in weapons and its military. In 2022, Israel’s military expenditure totaled $23.41 billion, and it ranks among the top 15 countries with highest military spending in the world.
14. Canada
Military Expenditure: $26.89 Billion
Canada is one of the largest countries in the world by size. The Canadian government invests heavily in defense products and services, and Canada is a major exporter of arms and weapons. Canada's military spending reached $26.89 billion in 2022.
13. Australia
Military Expenditure: $32.29 Billion
Australia is the largest country in Oceania comprising the mainland of the Australian continent and other smaller islands. In an effort to strengthen its security, Australia spent around $32.29 billion on military and defense in 2022.
12. Italy
Military Expenditure: $33.49 Billion
Italy is a country in Europe that is known for its firearms and small weapons. It is also home to a thriving aerospace and defense industry. Italy is a major exporter of arms. In 2022, Italy’s military expenditure reached around $33.49 billion.
11. Ukraine
Military Expenditure: $43.99 Billion
Ukraine shares a border with Russia, and because of the ongoing conflict with Russia, it spends heavily on defense and military. Ukraine receives military aid from various countries, including the United States. In 2022, Ukraine’s military spending totaled $43.99 billion.
10. Japan
Military Expenditure: $45.99 Billion
Japan is an island nation in East Asia. While Japan has limited its military capabilities, it invests in defense and military to be able to defend against small-scale invasions. Japan ranks among the top 10 weapon importing countries in the world. In 2022, Japan’s military spending reached around $45.99 billion. It also ranks among the top 10 countries with highest military spending in the world.
9. South Korea
Military Expenditure: $46.36 Billion
South Korea is a country in East Asia. It shares a land border with North Korea, which is one of the most heavily militarized borders in the world. In 2022, South Korea’s military expenditure reached $46.36 billion.
8. France
Military Expenditure: $53.64 Billion
France is home to a well-established defense industry and a number of weapons and arms manufacturing firms. France is also a major exporter of weapons and arms. In 2022, France’s military spending totaled $53.64 billion.
7. Germany
Military Expenditure: $55.76 Billion
Germany, in Western Europe, is home to a number of historical sites relating to World War II. Home to major defense and weapons manufacturing corporations, Germany ranks among the top countries that export the most weapons in the world. In 2022, Germany’s military expenditure reached $55.76 billion.
6. United Kingdom
Military Expenditure: $68.46 Billion
The United Kingdom, or the UK, has significant military capability. Home to a sophisticated and mature defense industry, the UK ranks high among the top countries with highest military spending in the world. In 2022, the UK’s military expenditure reached $68.46 billion.