In 2023, Germany was the country in the European Union which spent the highest amount on military and defense, at 67.6 billion euros. However, it amounted to only 1.6 percent of its GDP, short of the two percent target set by NATO. Germany's military spending is likely to rise over the 2020s, as the country adjusts to the geopolitical crisis caused by Russia's war of aggression in Ukraine.

In 2022, the ratio of military expenditure to gross domestic product (GDP) in Germany increased by 0.1 percentage points (+7.52 percent) compared to 2021. With 1.39 percent, the ratio thereby reached its highest value in the observed period. Military expenditure refers to the total amount of money spent on a country's armed forces, including peacekeeping and defense operations. This figure is then given as a share of its gross domestic product (not total government expenditure). When comparing international figures there may be some discrepancies depending on what countries consider military spending.Find more key insights for the ratio of military expenditure to gross domestic product (GDP) in countries like Austria and Switzerland.

The Second World War was fought on such a large scale that it became total war in many countries - this is where the war effort is prioritized above all else, and the entire population and economy are mobilized to support all military endeavors. Germany and Japan were committing over 70 percent of their national income to the war effort in its final years.

There were also notable fluctuations that coincided with major events for corresponding powers. These included the UK's mobilization of its defenses in 1940, after Germany took most of Western Europe; the spike in Soviet military spending after Operation Barbarossa in June, 1941; and the U.S. entry into the war following the Pearl Harbor attacks in December, 1941.

Military spending in Germany has increased in recent years. In 2022, it amounted to almost 67 billion U.S. dollars. Military spending is regulated by a military budget, otherwise referred to as a defense budget. German army Germany is known for having had comparatively low military expenditure lately. Based on definitions provided by NATO, military or defense spending is supported not only by the military budget, but also by the Foreign Office for peacemaking and peacekeeping measures. Germany has a Ministry of Defence (Bundesministerium der Verteidigung). The current Minister of Defence is Boris Pistorius. His duties include not only being the commander in chief of the German armed forces (Bundeswehr) in times of peace, but also heading the German army administration and overseeing civilian staff in the military. International operations The largest number of German soldiers participating in international operations were stationed in Syria, Kosovo, and Lebanon. When Russia invaded Ukraine, Germany provided a lot of military support for soldiers. Recently, there has been a lot of debate about whether Germany needs to increase the amount of funding they put into the military. However, there is no simple answer and there are many different opinions in the government about what should be done.

The United States led the ranking of the countries with the highest military spending in 2023, with 916 billion U.S. dollars dedicated to the military. That constituted over 40 percent of the total military spending worldwide that year, which amounted to 2.4 trillion U.S. dollars. This amounted to 3.5 percent of the U.S. gross domestic product (GDP), placing the U.S. lower in the ranking of military expenditure as a percentage of GDP than for instance Saudi Arabia, Israel, Algeria, and Russia. China was the second largest military spender with an estimated 296 billion U.S. dollars spent, with Russia following in third. Defense budgetAccording to the U.S. Congressional Budget Office, the outlays for defense will rise to 1.1 trillion U.S. dollars by 2033. The largest parts of the budget are dedicated to the Departments of the Navy and the Air Force. The budget for the U.S. Air Force for 2024 was nearly 260 billion U.S. dollars.Global military spendingThe value of military spending globally has grown steadily in the past years and reached 2.44 trillion U.S. dollars in 2023. Reasons for this are the outbreak of the Russia-Ukraine war in 2022, the war in Gaza, as well as increasing tensions in the South China Sea. North America is by far the leading region worldwide in terms of expenditure on the military.

Germany DE: GDP: Growth: Final Consumption Expenditure: General Government data was reported at -1.492 % in 2023. This records a decrease from the previous number of 1.566 % for 2022. Germany DE: GDP: Growth: Final Consumption Expenditure: General Government data is updated yearly, averaging 1.695 % from Dec 1971 (Median) to 2023, with 53 observations. The data reached an all-time high of 6.380 % in 1971 and a record low of -2.125 % in 1989. Germany DE: GDP: Growth: Final Consumption Expenditure: General Government data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Germany – Table DE.World Bank.WDI: Gross Domestic Product: Annual Growth Rate. Annual percentage growth of general government final consumption expenditure based on constant local currency. Aggregates are based on constant 2015 prices, expressed in U.S. dollars. General government final consumption expenditure (general government consumption) includes all government current expenditures for purchases of goods and services (including compensation of employees). It also includes most expenditures on national defense and security, but excludes government military expenditures that are part of government capital formation.;World Bank national accounts data, and OECD National Accounts data files.;Weighted average;

As of 2021, France was the country in the European Union which spent the second greatest amount on its military, reaching almost 48 billion Euros in that year. While this amount has risen consistently since 2011, it has failed to keep pace with economic growth in the country, meaning that France has frequently fallen short of the two percent of GDP defense spending target set by NATO, although to a much lesser extent than in other EU member states, notably Germany.

European military fighting vehicle manufacturers suffer from intense competition from US manufacturers, representing a considerable proportion of imports. Nonetheless, Germany and France generate a substantial proportion of armoured vehicles under the industry's most significant manufacturer, KMW+NEXTER Defense Systems NV. Manufacturers rely on defence spending across Europe and non-NATO members to boost new order volumes. According to the European Commission, general government expenditure in the EU on defence amounted to 1.3 % of GDP in 2021. However, this figure is rising in response to the Russia-Ukraine conflict, boosting revenue prospects. Over the five years through 2024, industry revenue is forecast to drop at a compound annual rate of 4.7% to €5.4 billion. The COVID-19 outbreak caused revenue to plunge as factories temporarily closed amid lockdown measures, resulting in sub-optimal production levels throughout 2020. Industry revenue failed to fully rebound over 2021 and 2022, mainly because of supply-chain disruption, inflating input prices and restricting output volumes. The Russia-Ukraine conflict also invited a flood of armoured vehicle imports from the US, limiting European manufacturers' potential to capitalise on greater demand. In 2024, industry revenue is forecast to drop by 3.2%, thanks to intense competition from US manufacturers.
Over the five years through 2029, industry revenue is expected to expand at a compound annual rate of 3% to reach €6.2 billion. Increased geopolitical tension, namely the Russia-Ukraine and Israeli conflicts, will boost government spending on defence and armoured military vehicles. In February 2023, the UK government outlined plans to spend £242 billion on defence equipment procurement over the next 10 years, including £17.4 billion on land equipment. A progressive and strategic expansion in the European defence budget and the launch of infantry support projects will boost demand for military vehicles and fuel innovation.

On average, the EU-27 countries spent 1.2 percent of their GDP on military defense in 2020. Greece, Latvia, Estonia, and Romania all spent over two percent of their GDP for defense purposes. These four countries were consequently the only countries that fulfilled the NATO's two percent requirement agreed upon in 2006. Geopolitical consideration like the proximity to Russia as well as their histories are likely to have played a role in Latvia's and Estonia's decision for higher national defense investments than other European countries. The two biggest economies in the European Union, France and Germany, were under the two percent mark with 1.7 and 1.1 percent, respectively.

Of all the 27 member states of the European Union, only five countries reached the spending target of two percent set by NATO and the European Defense Agency in 2023. Of these, Poland, Estonia, Latvia, and Lithuania share a direct border with Russia, and there have been increasing tensions with their larger neighbor after the invasion of Ukraine in 2023. Italy, that has the largest army in the EU, spent only 1.2 percent of GDP on defense, while Germany, the most populated EU country, only invested 1.1 percent of GDP in defense.

The ratio of military expenditure to gross domestic product (GDP) in Switzerland decreased to 0.76 percent compared to the previous year. Nevertheless, the last two years recorded a significantly higher ratio than the preceding years.These figures refer to the total amount of money spent on a country's military, as a share of its gross domestic product (GDP). These figures apply to current expenditure on a country's armed forces, including peacekeeping forces and defense ministries, among others.Find more key insights for the ratio of military expenditure to gross domestic product (GDP) in countries like Germany and Austria.

The ratio of military expenditure to gross domestic product (GDP) in Austria decreased by 0.1 percentage points (-11.49 percent) in 2022 in comparison to the previous year. These figures refer to the total amount of money spent on a country's military, as a share of its gross domestic product (GDP). These figures apply to current expenditure on a country's armed forces, including peacekeeping forces and defense ministries, among others.Find more key insights for the ratio of military expenditure to gross domestic product (GDP) in countries like Switzerland and Germany.

As of 2022, the European Union member states spent almost 240 billion Euros collectively on military defense. This includes money spent on procuring weapons, paying salaries, and other operational costs, as well as research & development expenditure. The total amount spent on defense declined significantly following the global financial crisis, as European countries cut back on public expenditure, reaching a low point of 138 billion Euros in 2012. Since 2014, when Russia reemerged as a geopolitical threat to EU countries, due to its illegal annexation of Crimea from Ukraine and its covert military operations in the east of that country, military expenditure has increased sharply, rising particularly in Poland and Germany. Despite this, Germany still lags far behind the spending target set for it by NATO and the European Defence Agency of two percent of GDP.

Estonia donated the most significant percentage of its 2021 gross domestic product (GDP) to help Ukraine over the period between January 24, 2022, and December 31, 2024. Estonia contributed 2.2 percent of its GDP in bilateral aid, followed by Denmark with 2.17 percent of GDP. Besides the Nordic and Baltic countries, Poland donated the largest share of GDP. Western countries sent aid to Ukraine in view of the Russian invasion that began in February 2022. Who donated the most to Ukraine? In absolute terms, the largest bilateral aid allocations to Ukraine were made by the United States, at over 114 billion euros as of December 31, 2024. European Union (EU) institutions, such as the European Commission and the European Council, allocated the second-largest amount of assistance, at almost 49 billion euros. The United Kingdom (UK) was the fourth-leading source of bilateral aid. EU aid to Ukraine The EU has supported Ukraine with over 17 billion euros in financial assistance since 2014 as of January 2022. Of them, the largest share of aid has been provided as additional loans from the European Investment Bank (EIB) and the European Bank of Reconstruction and Development (EBRD). Among EU members, Germany allocated the largest amount of bilateral aid to Ukraine from January 24, 2022, at around 15 billion euros, while Denmark allocated the largest share of GDP.

Across the United States, the United Kingdom, Germany, and the European Union, gross domestic products (GDP) decreased in 2020 as a result of the COVID-19 pandemic. However, by 2021, growth rates were positive in all four areas again. The United Kingdom, Germany, and the European Union all experiencing slow economic growth in 2023 amid high inflation, with Germany even seeing an economic recession. GDP and its components GDP refers to the total market value of all goods and services that are produced within a country per year. It is composed of government spending, consumption, business investments and net exports. It is an important indicator to measure the economic strength of a country. Economists rely on a variety of factors when predicting future performance of the GDP. Inflation rate is one of the economic indicators providing insight into the future behavior of households, which make up a significant proportion of GDP. Projections are based on the past performance of such information. Future considerations Some factors can be more easily predicted than others. For example, projections of the annual inflation rate of the United States are easy to come by. However, the intensity and impact of something like Brexit is difficult to predict. Moreover, the occurrence and impact of events such as the COVID-19 pandemic and Russia's war in Ukraine is difficult to foresee. Hence, actual GDP growth may be higher or lower than the original estimates.

From January 24, 2022, to December 31, 2024, the European Union (EU) institutions, such as the Commission and the EU Council, provided around 49 billion euros in bilateral financial, humanitarian, and military aid to Ukraine in view of the Russian invasion that started in February 2022. The highest value of allocations was recorded from the United States at over 114 billion euros. U.S. aid to Ukraine As of December 31, 2024, the value of U.S. bilateral aid allocations to Ukraine represented 0.53 percent of 2021 donor GDP. The U.S. donated the largest amount of bilateral military, financial, and humanitarian aid to Ukraine. Generally, U.S. foreign aid to Ukraine has increased since 2015. Where does military aid to Ukraine come from? The U.S., Germany, the United Kingdom (UK), and Denmark were the largest suppliers of military aid to Ukraine. In monetary terms, the U.S. bilateral military assistance to the country reached approximately 64 billion euros as of December 31, 2024. As part of that aid, the U.S. transported over 7,700 air defense missiles and over 1,600 air defense systems to Ukraine and other European partners as of January 2025. Furthermore, the U.S. delivered the most units of M777 howitzer artillery to the country.