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U.S. Allies' Combined Defense Spending Surpasses Pentagon for First Time in Purchasing-Power Terms
America’s allies in NATO and the Indo-Pacific spent 111 percent of U.S. defense outlays in 2025 when adjusted for purchasing power, surpassing $1 trillion for the first time. The Economist analysis of SIPRI data shows the surge offset a 7.5 percent decline in the Pentagon’s budget. Global military expenditure hit a record $2.9 trillion.
May 12, 11:35 AM·1m read1 source
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U.S. spent on its own defense in 2025 when adjusted for purchasing power, according to an analysis published by The Economist using SIPRI data.
Spending by those allies surpassed $1 trillion in 2025 when adjusted for purchasing power. 5 percent decrease in the Pentagon’s 2025 budget.
U.S. Military spending has been more or less stagnant for several years. U.S. allies’ defense budgets have seen record growth over the same time period.
U.S. Military budget in 2025. U.S. NATO members plus Japan, South Korea, Thailand, Australia and the Philippines. European rearmament has been driven in large part by Russia’s war in Ukraine.
War spending in Europe surged 14 percent from 2024 to 2025, SIPRI’s data showed. The uptick in budgets across the globe offset the significant reduction in the Pentagon’s own 2025 budget. 9 trillion in 2025.
The United States accounts for more than 20 percent of total global military spending. Washington remains the single highest military spender by far in absolute terms.
U.S. Ukraine spent 40 percent of its GDP on the military.
U.S. Ally. The Stockholm International Peace Research Institute, or SIPRI, collects global defense budget data annually. Defense News reported the findings from Vienna. Linus Höller, Defense News’ Europe correspondent, wrote the article.
He holds master’s degrees in WMD nonproliferation, terrorism studies, and international relations.
