The amount the world spent on arms has fallen for the first time since 1998. This is according to the annual review of the Stockholm International Peace Research Institute (SIPRI). It said global military spending in 2012 fell to $1.75 trillion, a drop of half a per cent from 2011. That figure is roughly 2.5 per cent of the world's GDP, or about $250 for every person on Earth. The USA was the biggest spender, although its share fell below 40 per cent for the first time. The USA and its NATO allies spent one trillion dollars last year on their militaries. SIPRI said the decline is largely due to a decrease in the amount spent on fighting wars, particularly with military action in Afghanistan winding down.

SIPRI noted that while spending is falling in America and Europe, it is on the rise elsewhere. SIPRI spokesman Sam Perlo-Freeman said: "We are seeing what may be the beginning of a shift in the balance of world military spending from the rich Western countries to emerging regions." He said budgets in China, Russia, the Middle East and North Africa were on the rise. China is now the world's second-biggest spender after its budget rose by 7.8 per cent last year. However, this expenditure does not mean China is second in terms of world military power. SIPRI said: "China in some respects is still well behind Europe, even though it now spends as much as Britain, France and Germany combined."