A new report from IHS Markit says that global defense spending rose to $1.57 trillion during 2016 and defense expenditures are projected to continue to increase worldwide over the next decade.
IHS Markit said Monday the annual Jane’s Defense Budget Report covers nearly 99 percent of defense spending worldwide and forecasts defense expenditures for 105 countries.
“Defense spending returned to a healthy rate of growth in 2016, kicking off what we expect to be a decade of stronger global defense spending,” said Fenella McGerty, an IHS Jane’s principal analyst.
“Defense spending should recover to pre-financial crisis levels by 2018,” McGerty added.
IHS Markit predicted that the shift from territorial defense to power projection in the Asia Pacific will foster accelerated budget growth in the region within the medium term.
China’s defense budget is projected to nearly double from $123 billion in 2010 to $233 billion in 2020, approximately four times bigger than the U.K.’s and more than the Western European regional defense expenditure combined, IHS Markit added.
India became one of the top five global defense spenders in 2016 and overtook Saudi Arabia and Russia, according to the report.
The study also found that instability prevented defense budget cuts in the Middle East; NATO’s defense spending increased for the first time since 2010 due to challenges posed by Russia and the Islamic State militant group; and $10 billion will be added to Western European defense budgets to address security concerns.
IHS Markit projected that defense spending in the Baltics will increase from $981 million in 2014 to $2.1 billion by 2020 due to tensions with Russia.
U.S. defense budget reached $622 billion in 2016 from $615.7 billion in 2015 and the 2016 figure represents nearly 40 percent of this year’s global defense spend, the report stated.
The U.S., China, U.K., India and Saudi Arabia topped IHS Markit’s list of biggest defense budgets during 2016.