NATO spending hits $1.4 trillion amid rising security pressures

Europe and Canada sharply increased their defence spending last year, with expenditures rising by nearly one-fifth, according to the latest annual report published by NATO on March 26, cited by Politico. The report highlights a significant overall rise in military budgets across the alliance, even as notable disparities in spending levels persist among member states.

The analysis, based on NATO estimates for 2025, found that all 32 allies met the alliance’s long-standing benchmark of allocating at least 2 per cent of gross domestic product to defence. The milestone reflects mounting pressure on member states to bolster military capabilities amid Russia’s continued aggression and sustained calls from Donald Trump for allies to increase their contributions.

Total defence spending across NATO reached $1.4 trillion in 2025, marking a 6 per cent increase compared to 2024.

“This shows that NATO allies recognise our changed security environment, and the need to meet our collective obligations,” NATO Secretary-General Mark Rutte wrote in the report. “I expect the NATO Summit in Ankara this July to build on our achievements in 2025. There is no room for complacency and no time to waste.”

Despite the overall increase, the report underscored wide variations in how much individual countries spend relative to their economies. Spain, Portugal, Albania, Belgium and Canada recorded the lowest defence spending levels as a share of GDP in 2025, each meeting the 2 per cent threshold but not exceeding it.

At the other end of the spectrum, Poland led the alliance with defence spending equal to 4.3 per cent of GDP. Lithuania, Latvia, Estonia and Denmark also maintained significantly higher levels, each allocating well over 3 per cent.

In terms of year-on-year changes in absolute spending, Luxembourg, Belgium and Slovenia recorded the largest increases. By contrast, defence expenditures declined in Hungary, the Czech Republic and the United States.

Between 2024 and 2025, Europe and Canada together boosted their defence spending by 19 per cent, reaching a combined $574 billion. Over the same period, US defence spending edged down slightly to $838 billion. As a result, the US share of total NATO defence expenditures fell from 64 per cent to 59 per cent.

The report also highlighted a significant increase in investment in military hardware. Spending by European allies and Canada on major equipment rose by 34 per cent in 2025.

Breakdowns by category showed varying priorities across member states. Greece allocated the largest share of its defence budget to personnel, Albania spent the most on infrastructure, Belgium led in operations and maintenance expenditures, and Luxembourg devoted the highest share to equipment and research.

The findings come after NATO countries agreed last year to raise their defence spending target to 5 per cent of GDP by 2035, a move taken under pressure from Trump and reflecting a shift toward greater long-term military investment across the alliance.

By Tamilla Hasanova