LONDON - In its 66th edition, the International Institute for Strategic Studies (IISS) Military Balance examines an increasingly complex international security environment and traces how countries are not only boosting spending and deploying new capabilities but developing new priorities for investment.
- Global military spending up 7.4% in 2024, rising to US$2.46 trillion.
- European defence spending is nominally 50% higher than in 2014, while Germany now holds the highest European defence budget in NATO.
- Evidence suggests that Ukraine has suffered a more serious drain on its personnel than Russia, with many ground units under-strength, while Russia – despite continuing to suffer high rates of losses in personnel and equipment – is able to draw on Cold War stocks and augment its forces with assistance from North Korea and Iran.
- China’s modernisation of the PLA has focussed on three key themes – anti-corruption, reorganisation and reform.
UKRAINE/RUSSIA CONFLICT
The IISS Military Balance examines the latest developments in Ukraine, where Russia is estimated to have lost significant numbers of men and equipment. IISS estimates that Russia lost a further 1,400 main battle tanks in 2024. Both sides are suffering from high attrition rates, but while Russia can currently sustain the manning of its forces, evidence suggests that Ukraine, which has generally kept its casualty figures secret, has suffered a serious drain on its personnel and faces challenges in force management – with many ground units under-strength.
It is likely that personnel losses will rise for Russia if they retain a similar offensive posture, because of a relative scarcity of armoured fighting vehicles – even without Russia’s ambitious force-expansion plans.
Pressures on the Russian military continue to build. Its Black Sea Fleet appears somewhat constrained, with Ukraine establishing a de facto maritime corridor utilising the territorial waters of nearby states. But low-cost glide bombs launched from well-beyond the reach of Ukrainian defences remain Russia’s most potent threat from the air. Among Russia’s most potent attacks are those that involve multiple types of missiles, drones and decoys, and which attempt to confuse and overwhelm air defences and exhaust munitions stocks.
Closer cooperation with Iran and North Korea continues. 10,000 North Korean troops have been sent to bolster Russian forces, while Iranian production of drones and ballistic missiles for Russia has been increased.
Ukraine has received more advanced Western equipment, though not always in the volume or with the freedom of action that Kyiv would prefer. While an initial European Union target to deliver one million 155-millimetre shells to Ukraine within a year was missed, production capacity was certainly increasing and the EU estimated member states would reach two million shells per year by the end of 2025.
Russia’s military expenditure has increased by 41.9% to take its budget to the equivalent of 6.7% of GDP, which is higher than total European defence spending in purchasing-power-parity terms. But it is becoming increasingly difficult to quantify overall spending with regions and corporations funding travel sponsorship, sign-up inducements funded from outside the defence budget and families expected to supply basic equipment and provisions.
But Russia’s economy remains resilient, as non-energy revenues make it possible to increase spending while maintaining a modest budget deficit and the central bank actively manages wider economic risks, allowing elevated levels of defence spending to continue.
MILITARY SPENDING
Overall, global defence spending has increased by 7.4% in 2024, with all regions bar Sub-Saharan Africa on the rise.
While Russia’s increase has targeted modernisation and recapitalisation, investment allocations in Europe remain higher among NATO members. Germany’s 23.2% rise means that only the United States has a bigger national defence budget within NATO. In real terms, European defence spending is nominally 50% higher compared to 2014, but the overall picture is more complicated. With budget pressures in most European countries continuing, sustaining increased spending is likely to be challenging. The burden is not broadly shared, with some NATO countries spending above 3% of GDP, while others remain below the 2% baseline.
IISS data shows that current NATO defence spending stands at US$1.44 trillion, with Europe’s US$442 billion representing less than one-third of the total. A commitment of 3% across European members of the Alliance would see that figure grow by over US$250bn and almost US$800bn if 5% were achieved. However, such figures are unachievable at this time, with some countries using off-budget instruments to bolster budgets.
While the United States budget remains at 3.39% of GDP, limitations are evident in its defence-industrial base, with investment taking place under the National Defense Industrial Strategy to increase capacity and train the workforce of the future.
MODERNISATION OF CHINA’S PEOPLE’S LIBERATION ARMY (PLA)
China’s armed forces are continuing to modernise under three specific themes – anti-corruption, reorganisation and reform.
Significant efforts to root out corruption within the PLA appear to be ongoing and major efforts to reorganise the PLA are also taking shape, with four services and four arms established. While President Xi Jinping has even closer oversight, it also suggests that the PLA is making progress towards building an ‘intelligentised’ military.
The Chinese Communist Party (CCP) is also deepening what it terms ‘Military-Civil Fusion’, simplifying procurement across both military and civilian sectors and improving R&D, while upgrading joint-operations capabilities across the PLA. An uplift in spending by 7% sees China’s budget of around US$235bn make up 44% of total spending in Asia.
New capabilities are emerging in many areas, with new aircraft designs breaking cover and a continued rollout of J-20 multirole aircraft. A third aircraft-carrier, the Fujian, has commenced sea trials and a fourth is believed to be under construction. Two new long-range fire-support brigades have been formed.
