Last week USA passed an aid package worth $95 Bn that would help support the ongoing and might-be conflict in Ukraine, Israel and the Indo-Pacific. This comes at a time when NATO is having talks with Ukraine to provide $100 Bn assistance over the next 5 years.
These numbers can be overwhelming but not when it is put against the total military spending in 2023 which amounted to $2.4 Trillion. According to a report by SIPRI, 2023 growth in spending was 6.8% the steepest increase since 2009. This spending now accounts for 2.3% of Global GDP.
Another surprising fact is that the Top 5 countries account for 61% of them US and China account for 49% of the total. And the continued escalation will only add to these numbers.
As Ukraine Ukraine-Russia conflict enters its third year it has become more complex as infrastructure sites get attacked. In the Middle East currently, there is some level of containment to Israel Hamas conflict but the risk of escalation is present at all times.
Given the current prospect of large-scale conflict, countries continue to find reasons to increase military spending in the near and medium term. This might be positive for the military complex but it has a more negative impact on the global economy as it might push inflation higher with a conflict premium on everything for a longer period.