Pakistan is increasing its defense budget 17 percent for the coming year, to $5.2 billion. While Pakistan increases its defense spending every year, to try and keep up with archrival India, it rarely goes up this much. The increase this year was mostly due to the war against the Taliban in the tribal territories, and Islamic terrorism in general. At the same time, most of the increase is covered by military aid from the United States (which has provided some $10 billion in military aid in the last eight years.).
Two years ago, for the first time in over four decades, Pakistan released information on its defense spending. That year's spending was $4.1 billion. That figure explains why this data has been kept secret for so long. That's because Pakistan's military rival, and neighbor, India was, two years ago, increasing its defense budget by nearly 50 percent, to $39 billion. The difference should be no surprise. India has six times the population (at 1.1 billion) and 7.5 times the GDP ($1.1 trillion compared to $145 billion). India's economy has been booming for over a decade, while Pakistan's largely stagnates.
This military spending disparity has long been suspected, even with the secrecy. The GDP differences were well known, as were the details of how the two forces were equipped. This, of course, is why Pakistan put so much effort into developing nuclear weapons. Only this would provide a credible defense against a foe with superior conventional forces. Pakistan has been spending about three percent of GDP on defense, while India was long been spending two percent (the proposed increase will make it three percent). The global average back then was about 2.5 percent. Now it's closer to 2.8 percent, while Pakistan's is a bit over three percent. Most of the most powerful military powers on the planet spend at least three percent of GDP on defense. Pakistan has been spending money it doesn't have, in a vain effort to keep up with its much larger neighbor. Now that India has matched Pakistan's three percent, Pakistan has to seriously consider peace, because they can't afford to go above three percent of GDP.