NATO reveals unprecedented increase in member countries’ defense spending in 2025
NATO announced on Wednesday (August 27) that in 2025, all 32 member countries of this transatlantic military alliance have achieved the target of “defense spending as a percentage of GDP at 2%” for the first time in its history.
According to the annual data released by NATO, the total defense expenditure in 2025 is estimated to reach $1.588 trillion, with the United States spending around $980 billion, accounting for over 60% of the total, while Europe and Canada together spend about $608 billion.
Last year, more than 10 countries among the 32 NATO members failed to meet the 2% target.
During the NATO summit in The Hague in June of this year, NATO leaders agreed on a more ambitious plan: to increase defense-related spending to 5% of GDP by 2035, with 3.5% allocated for “core defense spending” and the remaining 1.5% for areas such as infrastructure and cybersecurity.
This new agreement is seen as a significant milestone for NATO and is considered one of the important conditions for NATO member countries to receive continued support from US President Donald Trump.
Since Russia’s invasion of Ukraine in 2022, European leaders have been forced to significantly reassess the threat from Moscow, leading to a revitalization of defense spending within NATO.
According to NATO reports, Poland has the highest proportion of defense spending to GDP among NATO members, reaching 4.48%; followed by Lithuania at 4%, and Latvia at 3.73%. These three countries are the current allies that have met the new NATO standards.
Other countries with defense spending exceeding 3% of GDP include Estonia (3.38%), Norway (3.35%), Denmark (3.22%), and the United States (3.22%).
According to NATO estimates, Germany plans to double its annual defense budget to €162 billion (about $188 billion) over the next four years and has pledged to allocate €9 billion annually to support Ukraine. This means that Germany will play a leading role among European countries in driving military expenditure growth.
The United States remains the largest contributor to NATO’s defense spending, with an estimated $980 billion in defense expenditure in 2025, accounting for about 62% of the alliance’s total. However, the Pentagon is reviewing global force deployments and warning of possible troop reductions in Europe to focus resources on countering the increasing military threat from China.
This reflects Washington’s desire for European allies to take on greater defense responsibilities while maintaining their security commitments.
Over the past decade, Eastern and Northern European countries have seen remarkable increases in military spending.
Lithuania saw a growth of up to 535%, Latvia 383%, Poland 255%, and Denmark 264%. Compared to Western European countries, these neighboring countries close to Russia have experienced the most rapid rise in military expenditure, reflecting how geopolitical threats directly drive skyrocketing defense spending.
The official NATO report also reveals differences in the structure of defense spending among countries.
In terms of per capita military spending in 2025, Norway has the highest at an average of $3,191 per person. This is followed by the United States ($2,469) and Denmark ($2,400). In contrast, Balkan countries have significantly lower average spending per capita, with Albania at $159, North Macedonia at $172, and Montenegro at $226.
Regarding expenditure structure, NATO mandates that at least 20% of defense spending should be used for equipment, but there are noticeable disparities among countries: Poland fulfills 54.44%, Lithuania 45.84%, Finland 45.97%, while Portugal is at 20.00%, Canada at 22.55%, and Belgium as low as 14.54%.
Several Western military and intelligence agencies have warned that once the war in Ukraine ends, Russia could possess the capability to attack NATO territory within three to five years.
This risk assessment further underscores the need for NATO to accelerate its military expansion to maintain its deterrent effect.
NATO Secretary-General Mark Rutte has also emphasized that “having funding alone does not bring security… Deterrence does not come from percentages, but from the actual capability to engage with potential enemies.”