The world spent less on weapons and military services in 2012 than the year before, the first annual drop since 1998, a Swedish think tank said on Monday.

But despite the overall decrease, driven mainly by budget cuts in the Western countries, China and Russia both boosted spending last year, the Stockholm International Peace Research Institute (SIPRI) said.

“We are seeing what may be the beginning of a shift in the balance of world military spending from the rich Western countries to emerging regions,” said Sam Perlo-Freeman, director of SIPRI’s Military Expenditure and Arms Production Programme.

“Austerity policies and the drawdown in Afghanistan reduce spending in the former, while economic growth funds continuing increases elsewhere.”

Excluding inflation, world military expenditure fell 0.5 percent to $1.75 trillion (1.33 trillion euros) in 2012 from 2011, according to SIPRI’s data.