Report: Military spending spikes in Middle East, Eastern Europe

Excluding the U.S., however, “total military expenditure for the ‘rest of the world’ has increased continuously since 1998 and was up by 3.1 percent in 2014,” the SIPRI researchers found. The three largest spenders after the U.S. – China, Russia and Saudi Arabia – all ramped up their military spending considerably in 2014, each for different reasons.

Saudi Arabia saw the largest jump of the top-15 spenders, boosting its expenditures by a massive 17 percent. According to SIPRI, this increase is "a reflection both of the continuing conflict and instability in the surrounding region and of the revenues available to the government from the high price of oil that prevailed."

The political unrest of the Arab Spring coupled with Iran's growing influence across the Middle East have made autocratic Sunni regimes like Saudi Arabia increasingly security-minded. Last month, a Saudi-led coalition of predominantly Sunni Arab states — including Egypt, the UAE and Qatar — announced the creation of a joint military force that analysts have dubbed an "Arab NATO." Coupled with the regional military spending boom, the newly-formed force is seen as an effort to counter the expansion of Iran, the regional Shia power, at a time when their traditional ally, Washington, appears less inclined to intervene.

Eastern Europe was another hotspot in 2014 and will likely be this year as well, SIPRI found. Russia’s 8 percent jump in spending reflects, in part, its confrontation with the West over the crisis in Ukraine. After the pro-Western uprising in Kiev last year spurred Russia to intervene on behalf of the country's pro-Russian rebels, a tense standoff has played out between Moscow and NATO, the Western military alliance that backs the Ukrainian government. The conflict has encouraged defense spending not only by Ukraine and Russia, but also in Poland and the Baltic States, former Soviet republics that feel threatened by the Kremlin's aggressive bearing in the region.

“Russia’s been the driving force of that; they’ve been increasing spending and feeling very vulnerable to NATO,” said Samuel Perlo-Freeman, Head of the SIPRI Project on Military Expenditure and one of the report’s authors.

For China, military spending has grown consistently along with its economy and geopolitical ambitions, Perlo-Freeman said. Chinese military spending has roughly tracked the country's GDP, both of which have been expanding by about 10 percent each of the past few years.