BOFIT Viikkokatsaus / BOFIT Weekly Review 2022/17

New figures released by the Stockholm International Peace Research Institute (SIPRI) show that Russia’s 2021 military spending amounted to 66 billion dollars, or about 4 % of GDP. Military spending in fixed prices was at its highest level in five years. Russia hit a post-Soviet peak in military spending in 2016, when it corresponded to 5.4 % of GDP. At that time, the military budget included a substantial government support package to pay off the loans of military industry contractors.

Russian military spending adjusted for the size of its economy is relatively high by global standards, even approaching the levels of Middle Eastern countries. Russia’s military spending in recent years has averaged around 4 % of GDP, which exceeds the averages of the US (3.5 %), China (1.8 %) and EU countries (1.5 %).

In terms of gross military spending, Russia lags well behind the spending of the world’s biggest economic powers. US military spending last year reached 800 billion dollars. SIPRI put China’s spending last year at 290 billion dollars. Total EU military spending amounted to 260 billion dollars. Ukraine’s military spending has soared since Russia’s illegal annexation of the Crimean peninsula in 2014. SIPRI estimates that Ukraine’s military spending last year was about 6 billion dollars, which was roughly on par with the level of Finnish spending.

SIPRI also issues estimates of global arms trade. According to the latest SIPRI estimates, Russia last year was the world’s third largest arms exporter after the US and France. Russia’s top arms customers in 2017–2021 were India (28 % of arms exports), China (21 %), Egypt (13 %), Algeria (11 %) and Vietnam (4 %).

Relative to the size of its economy, Russia’s military spending was quite high by international standards in 2021


Sources: SIPRI, BOFIT.

Show weekly Review 2022/16 Show weekly Review 2022/18