Nato’s European members and Canada raised defence spending by 20% in real terms for 2025 compared with the previous year, according to Secretary General Mark Rutte’s annual report on 26 March 2026.
The report confirms that these countries collectively invested $574bn in defence, while the US contributed $838bn.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Nato allies are estimated to have spent over $1.4tn on core defence requirements in 2025, calculated in constant 2021 prices.
The US share represented 52% of Nato allies’ combined gross domestic product (GDP) and 60% of total nominal defence expenditure, as specified in the report.
The data shows that for the first time, all member states have met or surpassed the alliance’s 2014 commitment of allocating at least 2% of their GDP to defence.
Five countries including Albania, Belgium, Canada, Portugal, and Spain are projected to spend exactly 2%, while eight others including Croatia, Czech Republic, France, Hungary, Italy, Montenegro, Slovakia, and Slovenia are forecast to allocate up to 2.1%.
Finland and Sweden, Nato’s latest members who joined in 2023 and 2024, respectively, spent 2.87% and 2.5% of GDP on defence last year.
Three countries, Poland with 4.3%, Lithuania with 4%, and Latvia with 3.74%, reported investments above the new target of 3.5%, surpassing this threshold by a decade.
During last year’s Summit in The Hague, Nato members agreed to raise their defence investment objectives to 5% of GDP.
Rutte stated: “The figures in the report speak for themselves. We have made significant progress on defence investment, and Nato is stronger today than it has ever been.
“I expect the Nato Summit in Ankara this July to build on our improvement in 2025. There is no room for complacency and no time to waste, because the security of one billion people is at stake.”
Recently, Finland, the Netherlands, and the UK announced that they are considering establishing a new framework for defence financing and procurement by 2027.
Earlier this week, members of the Nato military alliance withdrew troops and personnel from Iraq amid the ongoing US and Israeli campaign against Iran, which continues to spill across the Middle East.
Nato said it raised alliance-wide ballistic missile defence posture earlier this month after intercepting a ballistic missile it said was launched from Iran and aimed at Türkiye.
