(CNN) The world saw a military spending boom in 2018, driven largely by the United States and China, which now account for almost half of the world's military expenditure, the Stockholm International Peace Research Institute (SIPRI) said in a new report.

Global spending on defense hit $1.82 trillion in 2018, up 2.6% on the previous year and the highest figure since 1988, the first year that reliable global data was available, according to the Swedish think tank

The United States -- which retains its title as the world's biggest military spender -- raised its spending for the first time in seven years to $649 billion in 2018. The US spent almost as much on defense in 2018 as the next eight countries on the list combined, the report said.

"They are in the midst of implementing a military modernization program over the next 20 to 25 years, which some analysts say will cost the US $1.8 trillion," Nan Tian, a researcher for the SIPRI Arms and Military Expenditure Program, told CNN.

He said the modernization program, which was agreed upon in the final year of the Obama administration, "will continue [military spending] increases in the US in the coming years," Tian added.

Read More