23 APRIL 2026
Rising Global Defence Spending Trends
Global military spending was already at an all-time high before the latest escalation in the Middle East. The confluence of the Russia–Ukraine war, rising US–China strategic competition and a broader deterioration in geopolitical stability has driven sustained increases in defence budgets across both NATO members and emerging markets.
NATO Spending Targets and Policy Shift
NATO is at the centre of this shift. Under sustained pressure from President Trump, the alliance’s benchmark spending target is moving from the long-standing 2% of GDP threshold towards a new target of 5% by 2035. For most member states, that represents a dramatic reorientation of public expenditure.
Middle East Conflict and Defence Investment Growth
The Gulf conflict accelerates this trend. Countries across the Middle East face immediate pressure to replenish depleted military stockpiles, upgrade and expand missile defence capabilities, and invest in next-generation systems. That spending does not stop when a conflict ends.
Long-Term Implications for Investors
For investors, this points to a prolonged and broadening cycle of defence expenditure – driven not by a single event but by a structural reassessment of security requirements across governments worldwide with a sustained increase in defence spending over the coming years.
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