LONDON — Russia’s military expenditure is rising so fast that it is outperforming all European countries combined despite their effort to boost budgets and rearm, according to the International Institute for Strategic Studies’ latest Military Balance report released Wednesday.
The think tank said that Russia’s military expenditure last year was forecast at 13.1 trillion rubles ($145.9 billion), or 6.7 percent of the country’s gross domestic product — over 40 percent higher than the previous year.
Meanwhile, Europe’s combined 2024 defense spending was $457 billion, more than 50 percent higher in nominal terms than it was in 2014, and 11.7 percent higher in real terms than the previous year.
But if Russia’s spending is calculated in purchasing power parity terms — used in countries like Russia where domestic inputs are significantly cheaper than on the world market — the Kremlin’s military expenditure would come to $461.6 billion, the IISS said.
Russia surpassing all of Europe in military expenditures is something new, a result of its “remarkable” defense growth and industrial reform, said Fenella McGerty, an IISS senior fellow for defense economics.
That adds weight to worries that Russia would be capable of attacking the continent once the war against Ukraine is over.
“We are not ready for what is coming our way in four to five years,” NATO Secretary-General Mark Rutte warned last year. Those cautions have been backed up by defense officials from across Europe.
The latest comes from Danish intelligence, which said this week that Russia could be ready to wage a “large-scale war” in Europe within five years.
Russia’s defense spending skyrocketed since its full-scale invasion of Ukraine almost three years ago and is set to increase by another 14 percent this year to 15.6 trillion rubles.
The war effort has forced huge changes on Russia, as its defense sector has consolidated to increase production in key areas like ammunition and artillery systems needed to support its so-called meat grinder tactics on the front lines.
The country’s industrial base is now spread across the wider economy and the private sector increasingly plays a greater role. “It’s a real adaptation that we’re seeing, not just in terms of spending,” said McGerty.
The fear in Europe is that Russia’s beefed up defense industrial capacity could be used against the European Union and NATO.
However, Russian leader Vladimir Putin’s gambit in Ukraine has wreaked a terrible cost on Russia’s preinvasion military and there are concerns about the sustainability of Russia’s current spending
The IISS estimated that 14,000 main battle tanks, infantry fighting vehicles and armored personnel carriers have been lost since the start of the war. While some have been replaced with domestic production, the country has also been forced to use “vintage” models like BTR-50 APCs and T-62 tanks, dating as far back as the 1950s.
Despite its significant losses, IISS analysts expect that Russia has the level of spending and weapon stores to continue its high-loss tactics through the rest of the year. Despite the high levels of spending, the country still has “ambitious plans” for a large postwar force, said Henry Boyd, senior fellow for military capability and data assessment.
Europe is increasingly moving to make up for years of low post-Cold War defense spending.
Last year, 24 of NATO’s 32 members hit the alliance’s target of spending at least 2 percent of GDP on defense, although United States President Donald Trump now wants that upped to 5 percent.
Countries close to Russia are racing to build up their militaries, even if that means buying from beyond Europe.
For instance, Poland signed $16.9 billion in contracts with South Korean arms producers between February 2022 and the end of October 2024 covering everything from mobile howitzers to tanks and jet fighters.
Some countries, led by France, want European nations to spend more at home and for EU spending programs to favor domestic industries. Others, including Germany, Poland and the Baltics, are keen to ensure strong security ties with the U.S. under Trump and to get off-the-shelf equipment their forces need.
Between mid-2022 and mid-2023, 63 percent of all EU defense orders were placed with U.S. companies and a further 15 percent with other non-EU suppliers, according to last year’s Draghi report, which looks to make Europe more competitive.
The EU is aware of the problem and is pressing for member countries to spend much more on defense. European Commission President Ursula von der Leyen said last year the bloc should look at spending an additional €500 billion on defense over the next decade.
Brussels is also setting up programs to boost the EU military industrial complex. An early effort is the €1.5 billion European Defence Industry Programme, although it’s led to wrangling among member countries over how open it would be to financing to non-EU arms-makers.
While European countries are doing more on defense, there are worries it’s still too little.
In the east, Russia continues its alarming military buildup, while at the same time traditional defense ties with the U.S. fray under Trump. That could leave the continent on its own for the first time since World War II.