NATO Defence Spending Surges with Most Allies Set to Hit 2% GDP Target in 2025
NATO’s overall defence expenditure is projected to reach an all-time high in 2025, with the alliance’s combined spending estimated at nearly $1.59 trillion for the year.
The Gaze reports this, referring to NATO’s latest expenditure data.
European Allies and Canada are together expected to spend roughly $608 billion in 2025, up from about $516 billion in 2024. In inflation-adjusted terms, that represents an impressive 15.9% real growth in one year for NATO’s non-U.S. members.
It also means that, for the first time, the European Allies and Canada will collectively meet NATO’s defense investment pledge, reaching about 2.27% of their combined GDP devoted to defence (up from 1.99% last year).
Poland is expected to lead the pack, devoting nearly 4.5% of GDP to defence in 2025, followed closely by the Baltic states and several Nordic allies.
Lithuania is allocating about 4.00% of GDP to defence in 2025, with Latvia at 3.73% and Estonia at 3.38%, some of the highest shares in the alliance.
These front-line nations, which border Russia or its close ally Belarus, have consistently been among NATO’s top spenders by GDP percentage, and they continue to increase budgets to modernize forces and deter any potential aggression.
Notably, Germany, long criticized for underspending, is poised to hit the 2% mark after spending only about 1.6% of GDP on defence as recently as 2023. Germany’s budget for 2025 was still pending at the time of NATO’s data collection, but the country has committed to meet the target, signaling a major policy shift in Berlin.
In absolute terms, the United States remains by far the largest contributor to NATO’s budget. U.S. defence spending is estimated at about $980 billion in 2025, accounting for roughly 60% of the alliance’s total outlays.
Among European powers, the United Kingdom is the top spender, projected at around $90.5 billion for 2025. France follows with approximately $66.5 billion.
These figures underscore the continued reliance on a few big economies for the lion’s share of NATO capabilities, even as other Allies rapidly increase their budgets.
Still, the gap is narrowing: the combined defence expenditure of NATO’s European members (plus Canada) has more than doubled since 2014 in real terms, and their share of the total alliance spending has grown significantly.
Read more on The Gaze: $120 Billion for Ukraine’s Victory: Why 2026 Defense Spending Is an Investment in Global Security