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Military spending in the Middle East reached an estimated $218 billion in 2025, marking a marginal increase of 0.1% compared to 2024, according to a new report by the Stockholm International Peace Research Institute.
In Israel, military expenditure declined by 4.9% to $48.3 billion, as the intensity of operations in Gaza decreased following the January 2025 ceasefire.
Despite the drop, Israel’s military spending remained 97% higher than in 2022, reflecting the long-term impact of regional tensions.
Meanwhile, Iran’s military spending fell for the second consecutive year, declining by 5.6% to $7.4 billion in 2025.
The report attributes the decrease primarily to economic pressures, including high inflation, which reached 42%.
“Despite the recent conflicts, Iran’s military spending decreased in real terms due to economic difficulties,” said Zubaida Karim, a researcher with SIPRI’s Military Expenditure and Arms Production Programme.
However, she noted that official figures may not fully reflect actual spending.
“Iran also uses off-budget oil revenues to finance its military, including the production of missiles and drones,” Karim added.
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