Global | The geopolitics of rearmament

Summary

Global geopolitical tensions are driving states to strengthen their defense capabilities, pushing military spending to a historic high equivalent to 2.4% of global GDP in 2025. In addition, there is a clear reprioritization of defense within public budgets across multiple economies.

Key points

• Key points:
• Europe is leading the new phase of global military expansion, accounting for more than 50% of the worldwide increase after raising its investment by nearly USD 70 billion compared with 2024.
• Germany is leading European growth, representing 30% of the region’s increase in defense spending. It is followed by Spain, Poland and Italy, with significant contributions of 18%, 11% and 10%, respectively.
• U.S. military effort contracted by 7.5% in real terms last year, after seven consecutive years of steady increases.
• The vast majority of European countries currently meet the 2% targets previously set by NATO, but only Poland and Latvia reach the new 3.5% threshold.

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