At SmartCapitalMind, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
Total military spending varies a lot from place to place and certainly from year to year, and capturing fixed totals can be challenging. A lot of spending is hard to classify, is categorized in different ways in different places, or isn’t reported at all. In general, agencies like the U.S. Central Intelligence Agency estimate that military spending worldwide amounts to anywhere between 700 and 900 billion U.S. dollars (USD) annually. This is usually anywhere from 1% to 3% of the world’s gross domestic product (GDP). It’s important to remember that published figures are just one way of looking at spending. Simply looking at how much money is devoted to a particular purpose is instructive, but must usually be viewed within the context of other factors like labor costs generally, cost of living, and, in the military context, whether service is voluntary or compulsory.
Understanding Military Spending Generally
There are a couple of different ways to think about and categorize money that’s spent on military endeavors. In some places, the total includes any and all funds that go towards defense, war, and strategies related to the same. This can be anything from soldier salaries and uniforms to the costs of machinery, firearms, and strikes. Sometimes things like entitlement benefits, retirement pay, and medical care for dependents factors in, too; sometimes this money is kept separate when accounting for overall spending and costs.
Gross Domestic Product and Spending Implications
GDP is usually calculated by adding up all of the spending within a country during a specific time. This includes consumer spending, government spending, investment income, and money made from exports. GDP is commonly used as one way of measuring a country’s economic strength. It’s of interest during trade negotiations and treaties, and is also the subject of research and analysis when looking at global stability.
Tracking how much various countries are spending on their militaries in terms of GDP is often thought to give some insight into how much that nation’s leaders value military strength, and also can say something about the strength or overall power of that military.
Estimates and Highest Published Percentages
The following table shows the countries around the world that have traditionally spend the highest percentage of their published GDP on their militaries. The U.S. normally features much farther down the list, usually occupying a space somewhere in the 40s; most calculations put U.S. spending at about 3%.