Sweden announces historic defence spending surge amid NATO integration

The Swedish government has unveiled a sweeping expansion of its defence budget, committing an additional 26.6 billion kronor ($2.87 billion) in 2026—a move that will raise military spending to 2.8% of GDP.

This represents an 18% year-on-year increase and continues a dramatic upward trajectory in national defence outlays, which have grown by 100 billion kronor since 2022. The announcement marks Sweden’s largest peacetime military investment since the Cold War, Caliber.Az reports, citing foreign media.

The spending boost is designed to fast-track Sweden’s alignment with NATO’s updated core defence spending targets. While the alliance currently encourages members to meet the 2% of GDP benchmark, recent signals from NATO indicate a push toward 3.5%—a threshold Sweden appears determined to exceed in coming years.

The full-scale Russian invasion of Ukraine in 2022 has fundamentally reshaped Sweden’s threat assessments. The new budget is intended to significantly enhance deterrence capabilities and readiness, particularly in areas such as air defense, cyber warfare, and rapid deployment forces.

The increase enjoys strong political backing. The ruling center-right coalition, which holds a parliamentary majority, is capitalizing on broad cross-party and public support for reinforced national defence, with national security now viewed as a consensus priority.

The expanded budget is expected to deliver substantial new contracts for major domestic and European defence companies. Swedish defence giant Saab is set to benefit, alongside international players such as BAE Systems and Rheinmetall, as Stockholm seeks to modernize its artillery systems, air defences, naval fleet, and tactical air transport capabilities.

The multiyear defence escalation will exert pressure on Sweden’s fiscal framework. While the government has not announced new taxes, analysts suggest the scale of investment may eventually necessitate borrowing or reallocations from other sectors, particularly if economic growth slows.

The full budget proposal will be submitted to the Riksdag on September 22. If approved, it will mark a definitive turning point in Sweden’s post-neutrality era—positioning the country not only as a committed NATO ally but as a central security actor in Northern Europe.

By Vafa Guliyeva