According to NATO’s annual report released on Thursday, European nations and Canada significantly increased their defense spending by 20% last year, reflecting changing security dynamics and the growing threat posed by Russian aggression. This uptick comes despite noticeable disparities in military expenditure across the alliance.
Defense spending reaches new heights
The report indicates that all 32 NATO member countries are on track to meet the target of allocating 2% of their GDP to defense by 2025. This commitment underscores the alliance’s response to evolving global threats. The total defense expenditure for last year reached $1.4 trillion, marking a 6% increase compared to the previous year.
“This shows that NATO allies recognise our changed security environment, and the need to meet our collective obligations,” NATO Secretary-General Mark Rutte stated in the report.
Rutte anticipates that the upcoming NATO Summit in Ankara this July will further solidify these advancements. He emphasized the importance of ongoing vigilance, stating, “There is no room for complacency and no time to waste.”
Disparities in defense spending among allies
Despite the overall increase in spending, the report highlights significant variations in defense budgets among member nations. By 2025, countries such as Spain, Portugal, Albania, Belgium, and Canada are projected to spend the least on defense, all hovering around the 2% mark.
On the other hand, Poland leads the alliance with the highest percentage of GDP devoted to defense at 4.3%, followed closely by Lithuania, Latvia, Estonia, and Denmark, all exceeding 3%. Notably, Luxembourg, Belgium, and Slovenia exhibited the most considerable absolute increases in their defense budgets year-on-year. In contrast, some nations, including Hungary, the Czech Republic, and the United States, experienced a decline in their military spending.
From 2024 to 2025, defense expenditures in Europe and Canada surged by 19%, totaling $574 billion, while U.S. spending saw a slight decrease to $838 billion. As a result, the U.S. share of total NATO defense spending fell from 64% to 59% last year.
Additionally, the report reveals that European and Canadian investments in major military equipment rose by 34% over the past year. When analyzing defense budgets, Greece allocated the most towards personnel, while Albania invested significantly in infrastructure. Belgium focused its spending on operations and maintenance, and Luxembourg led in expenditures for equipment and research.
In response to changing international dynamics and under pressure from former President Trump, NATO countries have set an ambitious goal to increase their defense spending target to 5% of GDP by 2035.