STOCKHOLM - World military spending rose for a sixth year running in 2004, growing by 5 percent to $1.04 trillion on the back of "massive" U.S. budgetary allocations for its war on terror, a leading research institute said on Tuesday.

With expenditure of $455 billion, the United States accounted for almost half the global figure, more than the combined total of the 32 next most powerful nations.

But world military expenditure was still 6 percent below all-time highs recorded in 1987-88 toward the end of the Cold War, Stockholm International Peace Research Institute (SIPRI) said in its annual yearbook.

With expenditure of $455 billion, the United States accounted for almost half the global figure, more than the combined total of the 32 next most powerful nations, said SIPRI, which is widely recognized for the reliability of its data.

In 2003, U.S. spending stood at $405 billion, SIPRI said.

"The major determinant of the world trend in military expenditure is the change in the United States, with its 47 percent of the world total," the Swedish government-funded institute said.

U.S. spending "has increased rapidly during the period 2002-2004 as a result of massive budgetary allocations for the 'global war on terrorism', primarily for military operations in Afghanistan and Iraq," it added.

U.S. military spending increased to 3.9 percent of gross domestic product (GDP) last year from 3.0 percent in 1999 but remained well below its Cold War peak of more than 6 percent, it said.

In 2004, the top-15 countries by military expenditure accounted for 82 percent of the global total, according to the institute whose database contains officially reported military spending for 159 countries.

SIPRI said Myanmar, for which it has no data, would probably rank among this group of countries.

The top five -- the United States, Britain, France, Japan and China -- spent 64 percent of the world total.

Measured by region military spending grew most last year, by over 14 percent, in South Asia -- mainly due to "a massive increase" in India's defense budget to $15 billion.

Growth in China's military spending slowed to 7 percent -- to $35 billion -- from on average 11.5 percent per year in the past decade. Russia's 2004 national defense budget increased almost five percent to $19 billion, SIPRI said.

Based on data for the past five years, Russia has overtaken the United States as the world's leading supplier of conventional weapons. Russia, the United States, Britain, France and Germany accounted for 81 percent of all conventional weapons deliveries in 2000-2004.

China and India were the two main recipients of conventional arms in 2004, the institute said.

© 2005 Reuters Ltd.

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