Global military spending surges as wars in Ukraine, Gaza reshape economies
Global military spending is climbing sharply as conflicts spread across multiple regions. European nations have tripled their arms imports since 2021, while the U.S. continues to dominate defense budgets. Meanwhile, wars in Ukraine, Gaza, Sudan, and elsewhere are pushing energy prices higher and reshaping arms markets.
The U.S. military budget remains unmatched, accounting for 37% of worldwide defense spending—more than the next nine largest spenders combined. American defense contractors have seen stock prices soar, with Huntington Ingalls up 50% since January and other major firms gaining between 40% and 61%.
Israel's defense industry is also expanding rapidly. Arms exports hit a record $14.8 billion in 2024, while Elbit Systems, the country's largest contractor, saw its stock jump 30% following military operations against Iran. The government now plans to privatise two key manufacturers: Israel Aerospace Industries and Rafael Advanced Defense Systems. In Europe, Switzerland has boosted arms exports in 2024, driven by demand from NATO allies amid tensions in the Middle East and Ukraine. Official figures, due early 2025, will confirm the scale of growth. The Swiss government also intends to raise defense spending to 1% of GDP by 2030. The conflicts have triggered wider economic effects. Oil and gas prices have spiked, increasing energy costs globally. Civilian casualties continue to mount in Gaza, Ukraine, Sudan, and Lebanon, with no immediate end in sight.
The surge in military spending reflects deepening global instability. Stock gains for defense firms and rising arms exports highlight how conflicts are reshaping economies. With energy prices climbing and wars persisting, the financial and humanitarian impacts are set to continue.
