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Fa-52 fighter jets fly during the Polish Army Day Parade on Wislostrada in Warsaw. Poland.
NATO anticipates that all of its 32 members will meet its longstanding target to spend 2% of GDP on defense, though only three meet the revised 3.5% target figure that alliance members agreed to achieve in core military spending by 2035.
Poland is leading the pack with 4.48% of GDP expected to go to defense in 2025, with Lithuania at 4% and Latvia at 3.53%, according to new alliance data on military expenditure published by NATO Aug. 28.
NATO’s national spending figures can include defense-related spending not included in the core military budget. The latest figures, for instance, indicate that Italy is set to spend about $13 billion more on defense in 2025 than the year prior, a 35.2% jump, while real-terms core defense budget growth was closer to 7%. In May, Italian Finance Minister Giancarlo Giorgetti said Italy planned to meet the 2% target primarily through accounting adjustments.
Spain, in the NATO numbers, gets credit for raising defense expenditure by around $11 billion for 2025. However, the government there has been open in stating that it could not reach the 2% target with its core defense budget. Prime Minister Pedro Sanchez announced an additional €10.4 billion ($12.1 billion) spending on defense-related capabilities in April but said, at that time, that just over half of that money would go towards core military resourcing by putting an extra €2 billion into military equipment and a further €3.6 billion for pay rises and improved conditions for armed forces personnel. The remainder of the spending uplift would flow to adjacent capabilities like communications, cyber and disaster relief.
Other countries at the bottom end of the scale include, at 2%, Belgium, North Macedonia, the Czech Republic and Luxembourg.
Germany, where the legislature still has to sign off on the 2025 budget, is poised to reach around 2.2% from its core budget and allocations from a special fund for the force, according to Aviation Week data. The country is likely to reach 2.4% once other defense-related expenditures are factored in. Berlin is on a steep ramp towards the new 3.5% of GDP target by the end of the decade.
Collectively, the alliance is set to spend $1.4 trillion on defense in 2025, based on 2021 prices and exchange rates.
All countries but Belgium meet a secondary NATO target of putting 20% of defense expenditure into equipment. The Belgian figure is 14.5%. Poland, which is undergoing a massive rearmament program, is allocating 54.4% of defense spending to modernization, according to NATO figures through June 3. Collective equipment expenditure this year would be around $28.4 billion, about equal to 2024.
The U.S. remains by far the biggest spender on defense, with its allocation set to represent about 3.22% of GDP.
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