Face-off with Russia over Ukraine lifts military spending in 2021, think tank says

[April 25, 2022]  STOCKHOLM (Reuters) - Military spending in Europe and Russia surged in the run-up to Moscow's invasion of Ukraine despite the subduing effects of the pandemic on economic growth, data published by the Stockholm International Peace Research Institute (SIPRI) showed on Monday.

The war in Ukraine, which Russia calls a "special military operation", has forced a rapid rethink in Europe over defence strategies and led a string of countries to promise large increases in military budgets.

It has also paved the way for a potential expansion of NATO military alliance to include Finland and Sweden.

The biggest effect of increased military budgets is likely to be visible in the coming years, but spending was already on the rise in 2021 amid heightened tensions in the run up to Russia's invasion.

Global military spending topped 2 trillion dollars for the first time ever last year, reaching $2,113 billion, up 0.7% from 2020, as expenditure rose for the seventh straight year, the influential defence think tank said.

Russia lifted its military outlay by 2.9% in 2021 to $65.9 billion as it built up its forces along the Ukrainian border, SIPRI said. It was the third consecutive year of growth in Russia's military spending, which reached 4.1% of GDP in 2021.

"High oil and gas revenues helped Russia to boost its military spending in 2021," Lucie Beraud-Sudreau, Director of SIPRI's Military Expenditure and Arms Production Programme, said in a statement.

Swedish and Finnish tanks are seen during a military exercise called "Cold Response 2022", gathering around 30,000 troops from NATO member countries plus Finland and Sweden, amid Russia's invasion of Ukraine, in Evenes, Norway, March 22, 2022. REUTERS/Yves Herman

"Russian military expenditure had been in decline between 2016 and 2019 as a result of low energy prices combined with sanctions in response to Russia’s annexation of Crimea in 2014."

Russia remained in fifth spot in terms of global military spending, behind the United States, China, India and the United Kingdom.

Ukraine spent $5.9 billion on its military in 2021, less than one tenth of Russia's budget, according to SIPRI.

Total military spending in Europe amounted to $418 billion and has been rising sharply since Russia's annexation of Crimea in 2014. Military budgets rose 3.0% from 2020 and stood 19% higher than in 2012, SIPRI said.

That figure is likely to increase sharply as countries like Germany, Belgium, Denmark and Sweden fulfil promises to boost spending to 2% of gross domestic product over the coming years.

Missile defence systems, drones and high-tech fighters are high on the shopping list of countries worried about Russia.

(Reporting by Simon Johnson; editing by Niklas Pollard and Raissa Kasolowsky)

[© 2022 Thomson Reuters. All rights reserved.]  This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.