World military expenditure, 2013

According to the review, world military expenditure kept declining last year since 2011, growing from 0.5% to 1.9% in real terms. Furthermore, world military expenditure amounted to $1,747 trillion, or 2.4% of global GDP.

A major part of the foregoing reduction can be explained by a reduction to $640bn, or 7.8% in real terms, in U.S. military expenditure in response to lessened intensity of military operations in Iraq and Afghanistan, as well as the implementation of the federal budget deficit reduction program. In 2013, U.S. military expenditure accounted for 37% of the world military expenditure.

Most of the European countries kept reducing their military expenditure. For instance, Austria, Belgium, Greece, Ireland, Italy, the Netherlands, Spain, Great Britain , and all Central European Countries, except for Poland and Germany, reduced their military expenditure by more than 10% in real terms in the period since 2008. French military expenditure contracted 4% in real terms against the figures recorded in 2008. Australia, Canada, and Brazil did the same.

The SIPRI shows that Russia’s military expenditure in 2013 increased 4.8% in real terms relative to 2012, which corresponds to our own estimation of direct military expenditure in Russia. According to the SIPRI, Russia’s military expenditure amounted to $87,8bn at the current exchange rate, while a special emphasis was placed on the burden of military expenditure on the Russian economy which accounted for 4.1% of GDP, overtaking the United States (3.8% of GDP) for the first time since 2003.

In 2013, Chinese military expenditure increased 7.4%, with a burden of military expenditure on the national economy accounting for 2% of GDP, which should be regarded as the result of a long-term strategy of increasing military expenditure at a rate being equal to the economic growth rate.

Vasily Zatsepin, Ph.D. in Military Science, Head of Gaidar Institute's Economics of the Military-Industrial Sector Department