Brazil Military Spending Jumps 13% to $23.9B; Global Defense Surge Impacts $EWZ

The Bottom Line

• Brazil's military expenditure increased 13% to US$23.9 billion in 2025, leading South America and ranking 21st globally.
• Global military spending reached US$2.9 trillion in 2025, marking the 11th consecutive annual rise, driven by geopolitical tensions.
• The expansion reflects broader trends in Europe and Asia, with significant increases in Germany, Spain, Russia, and Ukraine.

Brazil's Defense Spending Surges Amid Global Rise

Brazil's military expenditure is projected to reach US$23.9 billion (R$119.6 billion) in 2025, marking a 13% increase from the previous year, according to a report by the Stockholm International Peace Research Institute (SIPRI). This places Brazil as the leading defense spender in South America and the 21st largest globally. The rise in Brazilian spending aligns with a broader global trend of escalating military outlays, which saw worldwide expenditures hit approximately US$2.9 trillion (R$14.5 trillion) in 2025. This represents the 11th consecutive annual increase since the end of the Cold War, primarily fueled by a proliferation of international conflicts and heightened geopolitical tensions.

South American Context and Regional Dynamics

Total defense investments across South America amounted to US$56.3 billion (R$282 billion) in 2025, a 3.4% increase compared to 2024. Beyond Brazil, Guyana registered a notable 16% increase in its military spending, a move largely attributed to ongoing territorial disputes with Venezuela over the Essequibo region. Colombia and Mexico also feature in the global rankings, occupying the 29th and 30th positions, respectively, underscoring varied defense priorities and regional security landscapes.

Global Expenditure Landscape

Globally, the United States, China, and Russia collectively account for over half of all military spending, with a combined total of US$1.48 trillion. Despite a 7.5% reduction in U.S. expenditures, primarily due to the suspension of aid to Ukraine, the overall global increase was sustained by significant boosts in Europe and Asia.Europe, encompassing Russia and Ukraine, emerged as a primary driver of this growth, with a 14% increase, totaling US$864 billion. This surge reflects both the ongoing conflict in Ukraine and persistent pressure from the United States for European nations to enhance their defense capabilities and assume greater responsibility for regional security. Among European nations, Germany increased its spending by 24% to US$114 billion. Spain's defense budget saw a substantial 50% rise, exceeding 2% of its GDP for the first time since 1994, a key NATO benchmark. Russia's investments grew by 5.9% to US$190 billion, representing 7.5% of its GDP, while Ukraine's spending escalated by 20% to US$84.1 billion, equivalent to approximately 40% of its economy.In the Middle East, despite persistent tensions, the increase in military spending was more modest at 0.1%, reaching US$218 billion. Israel and Iran both recorded decreases in spending, though Iran's reduction is linked to high inflation rather than a strategic cutback. The Asia-Oceania region also experienced significant growth, with an 8.5% increase to US$681 billion, marking its fastest annual pace since 2009. This regional expansion is largely driven by China's rising military power and the reactive defense postures adopted by neighboring countries in response to perceived threats.The SIPRI report further highlights that the "military burden"—the proportion of global GDP allocated to defense—has reached its highest level since 2009, indicating a fundamental shift in global priorities towards security and defense in an increasingly volatile international environment. This sustained increase in defense spending across multiple continents suggests a long-term trend that could impact national budgets, technological innovation in defense industries, and international relations.