Six nations generated 60 percent of global spending in 2013, with the United States alone accounting for 35 percent, data from Deloitte showed. But U.S. spending has been declining since automatic spending caps were enacted in 2011, thus it's no surprise that IHS sees the country contributing the lion's share of declines next year.
"The impact of sequestration and declining Overseas Contingency Operations (OCO) funding drives the negative trend in the U.S. as well as creating short term uncertainty," IHS said, referring to the limits on government spending and terrorism-related military campaigns.
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The gloom in the U.S. is even expected to offset impressive growth in the world's second-largest spender, China. Earlier this year, Beijing increased its 2014 military budget by $132 billion, a 12.2 percent annual increase from 2013.
A look at the situation in Russia, the United Kingdom, and France, among the top seven biggest spenders in the world, also doesn't bode well for global trends.
Moscow is expected to increase military spending by 30 percent next year, but as the country faces a recession and a currency crisis, the finance minister reportedly warned a review of those figures was needed.
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"The current U.K. defense program assumes real zero growth for the defense budget between 2015 and 2020," Deloitte said. Meanwhile, French spending is set to decline by more than seven percent by 2019.