Chapter 1 - Finance
                 
Table 1.21 Top Worldwide Military Spenders: 2008
This table shows the Top 15 Worldwide Military Spenders in 2008. Figures are in US billion Dollars and at current prices and Exchange Rates. Countries are ranked separately using Market Exchange Rates and Purchasing Power Parity (PPP) rates. If a different base year were used, the rankings could change due to fluctuations in exchange rates. The calculations of military expenditure using PPP rates have been performed independently by DASA and are not sourced from the Stockholm International Peace Research Institute (SIPRI).

Conversion into a common currency using Market Exchange Rates (MER) tends to undervalue the currency, and hence the scale of expenditure of lower income countries. Although, this may also be because a large part of the economy of a lower income country is domestically based and not based on internationally traded goods and services. Attempts are often made to circumvent this problem using Purchasing Power Parity (PPP) measures. These use currency conversion rates which equalise the overall price of a bundle of goods and services in each country. However, PPP measures can be highly inaccurate because of the difficulty of allowing for differences in quality and devising appropriate and relevant “weighting” of individual goods and services. Civilian based PPPs may also not be representative of defence goods and services. As such, this table must be regarded as providing only an illustrative ranking of world-wide military spending.

The data in this table are outside the scope of National Statistics because they are provided by an organisation outside the UK Government Statistical Service.
At Current Prices and Exchange Rates  
Market Exchange Rates   Purchasing Power Parity Rates1
    Spending Spending
Per Capita		 World Share       Spending
Rank Country US$ billions US$ %   Rank   US$ billions
1 USA 607.0 1 967 41.5   1 USA 607.3
2 China [84.9] [63] [5.8]   2 China [155.3]
3 France 65.7 1 061 4.5   3 India 81.6
4 UK 65.3 1 070 4.5   4 Russia [79.1]
5 Russia [58.6] [413] [4.0]   5 UK 54.6
Sub-total Top 5 881.5   60   Sub-total Top 5 977.9
6 Germany 46.8 568 3.2   6 France 49.1
7 Japan 46.3 361 3.2   7 Saudi Arabia2 47.2
8 Italy 40.6 689 2.8   8 Japan 41.0
9 Saudi Arabia2 38.2 1 511 2.6   9 Germany 37.3
10 India 30.0 25 2.1   10 South Korea 34.9
Sub-total Top 10 1 083.4   74   Sub-total Top 10 1 187.4
11 South Korea 24.2 501 1.7   11 Italy 32.0
12 Brazil 23.3 120 1.6   12 Brazil 29.3
13 Canada 19.3 581 1.3   13 Iran3 21.7
14 Spain 19.2 430 1.3   14 Turkey 19.8
15 Australia 18.4 876 1.3   15 Taiwan 18.8
Sub-total Top 15 1 187.8   81   Sub-total Top 15 1 309.0
                 
World Total 1 464 217 100   World Total ..
Source: Stockholm International Peace Research Institute (SIPRI) & DASA (Defence Expenditure Analysis)
1. The figures in PPP dollar terms have been converted by DASA using estimated PPP rates (for 2008), based on price comparisons of the components of GDP
    published by the International Monetary Fund (IMF). SIPRI have not endorsed these estimates.
2. The figures for Saudi Arabia include expenditure for public order and safety and might be slight overestimates.
3. The figure for Iran is for national defence and does not include spending on the Revolutionary Guards Corps, which constitutes a considerable part of Iran's
    total military expenditure.
[ ] Indicates SIPRI estimate