The United States has increased its military expenditure for the first time since 2010, according to the Stockholm International Peace Research Institute (SIPRI).
Although U.S. spending remains 20 percent below its peak 5 years ago, it increased by 1.7 percent to $611 billion last year, according to SIPRI.
The increase marks the reversal of a trend that saw the U.S. reduce its military spend for 5 consecutive years due to economic uncertainty and the drawdown of troops in Iraq and Afghanistan.
Defense and aerospace firms have gained from this trend, with broad gains in the group.
Much of the bounce in defense spending has been as a result of President Donald Trump’s election in November last year, but SIPRI noted that uncertainty over the changing political situation in the U.S. makes it difficult to predict if the trend will continue.
The militarization of Asia
While the U.S. is the world’s biggest military spender, making up a solid third of the world’s expenditure on that front, the Asia Pacific is by far the fastest growing region.
Countries there collectively spent $450 billion on defense in 2016 — a 4.6 percent increase from the previous year.
Five of the world’s top 15 military spenders come from the Asia-Pacific, and regional defense spending has increased by 64 percent in the past decade, a stark reflection of the growing geopolitical tension in the Korean peninsula, East and South China Sea and between India and Pakistan.
China is the Asia Pacific’s largest spender, accounting for 48 percent — or close to half — of the region’s military expenditure. The rising superpower spent $215 billion on defense alone, which was almost four times that of its nearest rival, India. Those two nations collectively made up 60 percent of regional spend.
Tensions drive spending in Europe
Europe also increased its military expenditure in the past year, accounting for 20 percent of 2016 global spend in the sector. The continent spent $336 billion on defense last year — a 2.8 percent increase on the year before — with France, the U.K., Germany and Italy accounting for 10 percent of global expenditure.
The Baltic state of Latvia saw 2016’s largest single-year increase in military spending — 44 percent — a reflection of the rise in regional geopolitical tensions, and increased threat perception in Central Europe, according to SIPRI. Neighbor Lithuania increased its defense spending by 35 percent.
Russia, meanwhile, was the world’s third-largest military spender, accounting for 4.1 percent of total military expenditure. Moscow spent 5.3 percent of its GDP — or $69.2 billion — on defense last year. That was a 5.9 percent increase from the year before.