UK

UK moves to become third-biggest global defence spender, new report states

According to a new International Institute for Strategic Studies report, the UK's 2021 defence budget was $71.6bn.

The UK has overtaken India to become the third-largest defence spender in the world, according to a new report by the International Institute for Strategic Studies (IISS).

The new 'Military Balance 2022' report is an assessment of all military capabilities and defence economics of 171 countries worldwide.

According to the report, the UK's defence budget for 2021 was $71.6bn, with only the United States ($754bn) and China ($207.3bn) spending more.

Behind the UK was India, with a spend of $65.1bn, and Russia, which spent $62.2bn – 3.8% of its total GDP.

Finishing off the top 10 were fellow NATO allies France ($59.3bn) and Germany ($56.1bn), followed by Japan ($49.3bn), Saudi Arabia ($46.7bn) and South Korea ($46.7bn).

The report stated it was "clear" European countries had "turned a corner in terms of their defence spending, since Russia's annexation of Crimea in 2014 and subsequent military intervention in eastern Ukraine upended the continent's security landscape".

Watch: China boosts 2021 defence budget amid 'security risks'.

It also said it was clear "concern over Chinese and Russian military developments is driving regional as well as wider international military developments". 

The report outlined a "continued focus" in Europe on improving combat air capabilities, air defence and rocket artillery, as well as growing attention "on countering the non-military tools that Russia employs as part of its overall strategy". 

It added the same worries are also "driving closer co-operation between NATO and non-NATO states" concerned by Russian activity – particularly Finland, Sweden and Ukraine.

The IISS also outlined that, in 2021, European defence spending grew by 4.8% in real terms, more than any other geographical region – the seventh consecutive year of real-terms growth.

The increase last year, in combination with a reduction of spending in other regions, means defence spending in Europe represented 18.7% of the global total.

This is an increase after the total remained at between 16.5% and 17% annually since 2014.

Watch: UK announces further support for NATO response amid Russia tensions.

The continued increase of European defence spending "reflects sharpened threat perceptions", according to the report.

And the higher spend is adjusted for inflation, with surging inflation in other regions reducing the effect of nominal defence-budget increases.

The total global spend on defence rose again in 2021, reaching $1.92bn – an increase of 3.4% on 2020.

However, inflation in all regions meant this amounted to a 1.8% reduction in real terms.

There were real-term spending contractions in Latin America, sub-Saharan Africa, the Middle East and North Africa and in Russia and Eurasia, even though nominal increases were evident across most regions. 

The report also said that "if inflation continues to rise, it may increase pressure on defence budgets".

However, it also said defence spending in Asia, of which China accounted for 43% of total spending in the region in 2021, has "proven resilient" with "little evidence" the COVID-19 pandemic has "derailed planned defence investments".

The IISS report also said their budget predictions indicate that China's official budget could reach just under $270bn by 2030.