Russia overtakes all of Europe on defense spending in key metric: IISS military balance

Russia’s Orlan family of drones, on display at the World Defense Show, Saudi Arabia (Breaking Defense)

BELFAST — Based on one key economic metric, Russian defense spending eclipsed all other European countries combined last year and is projected to increase further in 2025, according to a leading defense think tank.

New analysis from the United Kingdom’s International Institute for Strategic Studies (IISS) found that Moscow’s military expenditure spiked by over 40 percent to almost $146 billion in the past year, equivalent to 6.7 percent GDP, and is on track to hit 7.5 percent GDP in 2025. When adjusted for purchasing power parity (PPP), Russia spent nearly $462 billion in 2024, effectively leapfrogging Europe’s collective spending. PPP is a tool used to remove price level differences between currencies in order to better demonstrate the purchasing strength of one over another.

“The PPP comparison is important to make, just to take into account the lower domestic input costs that Russia has….it’s a good indicator of why Russia is able to fund so much more with a seemingly smaller budget in US dollar terms,” Fenella McGerty, senior fellow for defence economics at IISS told media today.

The spending figures are included in the think tank’s newly published Military Balance report — a comprehensive annual review of global defense capabilities, military budgets and other related economic trends.

Ukraine’s offensive operations are having an impact however with IISS figures indicating that Russia lost 1400 main battle tanks last year, and 4000 in all since the war started.

“Indeed, the IISS assesses that Russia will not have sufficient main battle tanks to conduct effective offensive operations beyond early 2026 if it maintains the same operational tempo and suffers the same losses as in 2024,” Bastian Giegerich, IISS Director-General told media.

He also said that the conflict had “demonstrated increasing connections between European and Asia Pacific security” which included North Korea entering the conflict by deploying 10,000 troops, China’s decision to sell dual-use technologies to Russia and the “growing prominence” of South Korea selling equipment to countries including Poland.

Documenting battlefield developments from 2024, Giegerich acknowledged that neither Russia or Ukraine had been able to leverage a strategic advantage and explained that Kyiv was “increasingly strained by attrition and recruitment challenges.”

He added that Ukraine’s “inadequate combat mass has driven focus on fast innovation cycles, developing a growing range of UAVs and using one-way attack UAVs to strike deep inside Russia.”

Operational realities are also tempered by a decisive political shift in attitude toward the war by US President Donald Trump, his messaging around delivering a peace deal and the need for Europe to spend more on its own security.

Giegerich said that “strategic options are narrowing” for Ukraine, because of Trump’s pledge to “end the war quickly” and if Kyiv is to continue to stand up to Russian aggression, “international support will have to increase significantly beyond current levels.”

Such analysis arrived shortly before Pete Hegseth, US defense secretary, said this morning that it was “unrealistic” to expect a return to Ukraine’s pre-2014 borders, suggesting the same logic applies to the chances of the eastern European country joining NATO. The alliance has long stated that Ukraine belongs in NATO but has not set a timeline for membership.

Speaking at NATO’s headquarters in Brussels as part of a Ukraine Defense Contact Group meeting, Hegseth also ruled out US troops being deployed to Ukraine as part of any future security guarantee for Kyiv.

“Safeguarding European security must be an imperative for European members of NATO,” he added. “As part of this Europe must provide the overwhelming share of future lethal and nonlethal aid to Ukraine.”