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This is a list of countries by military expenditures using the latest information available. Some of the information is from the United States' Central Intelligence Agency's World Factbook.
Note that for some countries, no information was available to the World Factbook's compilers; these countries were omitted from the list. Consequently, the total world expenditure on armed forces is likely to be somewhat higher than that given.
Comparisons between figures in this table should be used with caution. There are comparison issues inherent with these figures: for example France, Italy and Spain include in their defence expenditures the costs of maintaining the Gendarmerie, Carabinieri and Guardia Civil- all of which are primarily domestic police forces. On the other hand some countries account military expenses under other budget voices: for example China, Mexico and Russia categorize spending on nuclear weapons, missile and fighter development as scientific expenses, spending on training are categorized under the education budget, and veteran pensions are afforded by welfare budget.
Note that this data is typically compiled by attempting to compute the local currency military expenditures, and then converting them at market exchange rates into a common currency. Therefore changes in the currency markets can cause a nations estimated military expenditures to change, even if that nation's budget remains constant. For developing economies, including China and India, this will result a smaller estimate than if the conversion were done using purchasing power parity. The differences can be substantial. For example, the Chinese Renminbi has a market price of 6.992 per US dollar at the market exchange rate, and an estimated purchasing power parity conversion of 3.694[1]. Using the purchasing power conversion would almost double the Chinese military estimate.
Below is a list of countries ranked by order of military expenditure as a percentage of GDP. This statistic reflects the importance of military buildup and army modernization for all countries. It also indicated how much priority each country places in military expenditure.
The greater a country spends on its military as a percentage of its GDP, the less money it will have to spend on other crucial aspects such as infrastructure and education, and the more likely it will come under scrutiny from other countries.[47]
The trend is that developing countries, especially Middle Eastern countries with emerging markets due to their oil wealth, and countries in proximity of conflict zones seem to be spending the most as a percentage of their GDP to modernize their military and to try to catch up with Western countries, which spend less as a result of having built a strong modernized military over the past few decades.
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