Russian military spending fell by a fifth last year, its first decline in nearly two decades, a report by defense think-tank the Stockholm International Peace Research Institute (SIPRI) showed yesterday. Russia dropped to fourth place in the ranking of the world's biggest military spenders, overtaken by Saudi Arabia.

Russia has flexed its military muscles during the last few years with its 2014 annexation of Ukraine's Crimea and deep involvement in the Syrian conflict serving as examples of its more belligerent stance. But while global military spending rose 1 percent to $1.739 billion last year, Russia's fell 20 percent in real terms to $66.3 billion, the report from SIPRI showed. It was the first fall since 1998, a year of a major crisis when Russia's economy collapsed and it defaulted on domestic debt. The following year Vladimir Putin took power as prime minister and, on New Year's Eve, president.

Russia's finances are still fragile following a two-year economic downturn brought on by Western sanctions and a collapse in global oil prices. Higher crude prices helped the economy return to growth of 1.5 percent last year, short of a government target of 2 percent. Putin has called for higher living standards and higher spending on social infrastructure, such as healthcare and education. Some government officials have called for lower military spending to free up funds for such initiatives. The Kremlin said in March Russia would cut its defense budget to less than 3 percent of gross domestic product within the next five years.

SIPRI said the five biggest spenders in 2017 were the United States, China, Saudi Arabia, Russia and India, which together accounted for 60 per cent of the total. Military spending accounted for 2.2 percent of global gross domestic product in 2017. The U.S. remains the world's biggest military spender by far, accounting for 35 percent of global expenditures, more than the next seven highest-spending countries combined. However, the U.S.'s military spending remained constant for the second consecutive year. Turkey increased its military spending to $18 billion in 2017, ranked 15th, according to the report, compared to the 2016 report with $14.9 billion. China increased its military spending by 5.6 percent to $228 billion in 2017. Its share of global military expenditure has risen from 5.8 percent in 2008 to 13 percent in 2017.

Because of what is perceived as a growing threat from Russia, military spending in Europe increased in 2017. Many European countries are members of NATO and, within that framework, have agreed to increase their military spending. Total military spending by all 29 members was $900 billion in 2017, accounting for 52 percent of world spending.

SIPRI noted that Poland was by far the largest military spender in central Europe, accounting for 42 percent of the region. Romania's military expenditure rose by 50 percent — the highest rate of increase in the world — as it started to implement a military procurement, modernization and expansion plan. Other notable increases in the region were those of Latvia and Lithuania, both of which increased their military spending by 21 percent.