STOCKHOLM (AP) - A Swedish-based arms watchdog says world military spending dipped last year for the first time since 1998.

The Stockholm International Peace Research Institute says the world spent US$1.75 trillion (S$2.2 trillion) on its armed forces in 2012, down 0.5 per cent from the year before.

SIPRI says military outlays dropped in the austerity-ridden West but rose in Russia, China and other emerging economies, highlighting "what may be the beginning of a shift in the balance of world military spending."

Still, SIPRI's report on Monday showed the US remains way ahead of all other countries, accounting for 39 per cent of global military spending in 2012.