The fall—the first since 1998—was driven by major spending cuts in the USA and Western and Central Europe, as well as in Australia, Canada and Japan. The reductions were, however, substantially offset by increased spending in Asia, Eastern Europe, the Middle East and North Africa, and Latin America. China, the second largest spender in 2012, increased its expenditure by 7.8 per cent ($11.5 billion). Russia, the third largest spender, increased its expenditure by 16 per cent ($12.3 billion).
Despite the drop, the global total was still higher in real terms than the peak near the end of the cold war.