Moscow: World military expenditures totalled $1.75 trillion in 2012, registering a decline of 0.5 percent in real terms year-on-year for the first time since 1998, according to data released by a Sweden-based security think-tank.
The Stockholm International Peace Research Institute (SIPRI) attributed the fall to austerity policies implemented in the majority of developed countries due to the global economic crisis that began in 2008.
The SIPRI noted, however, that deep defence cuts in the US and other NATO countries, as well as in Australia, Canada and Japan were largely offset by significant increases elsewhere in the world, including in Russia and China.
This could be a potential "shift in the balance of world military spending from the rich Western countries to emerging regions", the SIPRI said in a comprehensive annual update to its Military Expenditure Database.
Military spending in the US fell in 2012 by six percent to $682 billion, mostly as a result of reduced war spending in light of US withdrawal from Afghanistan and projected budget cuts linked to the 2011 Budget Control Act.
However, the US remains the world`s largest military spender, accounting for 39 percent of the global expenditures.
Meanwhile, China, the second largest spender in 2012, increased its expenditure by 7.8 percent ($11.5 billion) to $166 billion, while Russia, the third largest spender, increased its expenditure by 16 percent ($12.3 billion) to $90.7 billion, according to SIPRI estimates.
Recent significant increases in Russia`s annual military spending are attributed to the implementation of an ambitious rearmament programme, which will see the share of modern weaponry reach 30 percent by 2015 and total 70 percent by 2020.
"Projected increases will take military spending in Russia from 4.4 percent of the GDP in 2012 to 4.8 percent in 2015," the SIPRI said.
The SIPRI also reported increases in other parts of the world, most notably in North Africa and the Middle East, with 7.8 percent and 8.4 percent hikes in 2012, respectively.
Overall, "the global total was still higher in real terms than the peak near the end of the Cold War", the SIPRI said.