Half of the countries in the world have increased their defense spending in 2020-2024. These data are presented in the analytical chapter of the International Monetary Fund (IMF) report “World Economic Outlook“, presented in Washington.
Experts note that the number of conflicts worldwide has increased significantly since the mid-2010s, “reaching levels not seen since World War II“. “This change has forced countries to rethink their defense spending priorities. As a result, 50% of countries around the world increased their defense spending between 2020 and 2024, and nearly 40% were spending more than 2% of GDP on defense by 2024, compared to 27% in 2018,” the report noted. Meanwhile, arms sales by the world’s 100 largest manufacturers “have doubled over the past two decades,” the report added.
The report noted that “these figures are expected to continue to rise as NATO member states committed in June 2025 to increase their annual defense and security budgets to 5% of GDP by 2035.” Experts believe that “the actual and projected increase in defense spending is associated with significant macroeconomic trade-offs, especially in the context of the continued growth of public debt and increasing pressure on fiscal spending“.
The Fund's experts note that increased defense spending “can contribute to economic growth in the medium term through capital accumulation and increased productivity“. On the other hand, this threatens to undermine fiscal sustainability, since “on average, a surge in defense spending is followed by an increase in the budget deficit by approximately 2.6 percentage points of GDP and an increase in public debt to GDP by approximately 7 percentage points over three years“.