As global economic conditions began to cool down in 2022, nominal defense spending moved on a different track, trending strongly upwards in response to the first industrial-scale conflict on the European continent in decades. With threat perceptions intensifying in a sweeping arc around Russia's borders, total worldwide military investment rose by 6.4 percent, largely driven by renewed commitments to defense among NATO members and aspiring members, as well as countries along China's perimeter.

While facing extremely high levels of inflation, energy pressures and slower economic growth, many governments worldwide began reassessing military investment and security approaches as the Russia-Ukraine War intensified. This resulted in a higher-than-normal uptick in year-on-year military investment than normally would occur in a year in which the larger economic picture presented headwinds. The resiliency of defense spending as both a national security necessity and an economic investment at a time of rising debt pressures indicates that geopolitical realities will continue to trump government balance sheets over the near term.