Germany's Military Spending Surges Past 2% GDP in 2025, Ranking Fourth Globally

In 2025, Germany significantly increased its military expenditure by 24%, reaching €97 billion (approximately $114 billion), marking the third consecutive year of substantial rises in defense spending. This surge pushed Germany's military spending above 2.3% of its Gross Domestic Product (GDP), surpassing NATO’s 2% target for the first time since 1990 and positioning the country as the fourth largest military spender worldwide, according to reports by the Stockholm International Peace Research Institute (SIPRI).

This notable growth came amid a broader trend of rising European military expenditures, which increased collectively by 14% during 2025. SIPRI highlighted this as the largest annual growth in military spending in Central and Western Europe since the Cold War’s end. The increase is part of a response to ongoing geopolitical tensions and growing uncertainties about the future of U.S. support within NATO.

While Germany and other European NATO countries ramped up their defense budgets, the United States saw a 7.5% reduction, spending approximately $814 billion due to decreased financial aid for Ukraine. Nevertheless, the U.S. remains the world's top military spender. In Eastern Europe, both Russia and Ukraine amplified their military budgets; Russia’s defense spending rose by 5.9% to an estimated $190 billion, and Ukraine allocated an extraordinary 40% of its GDP to defense, with spending reaching about $84.1 billion amid ongoing conflict.

SIPRI researchers suggested this escalation in military expenditures is likely to continue given the persistence of global conflicts and geopolitical instability. The sustained increase highlights Germany’s shifting defense posture, as it plans to further raise military spending to 3.5% of GDP by 2029.

This development marks a historic shift in Germany’s post-Cold War defense policy and reflects heightened concerns over European security. SIPRI’s Jade Guiberteau Ricard underscored that the surge in military spending underlines a transformation in the European security landscape, driven by global conflicts and evolving alliances.