Lithuania and Estonia raise defense spending to 5% of GDP at Trump's demand
The Baltic states have approved record budgets for 2026: Lithuania and Estonia are allocating 5% or more of GDP to defense, while Latvia aims to reach that level in 2027.
By Oleg Bazylewicz
December 11, 2025 · 2 min read
The Baltic countries adopted record defense budgets for 2026. Lithuania and Estonia answered the U.S. call to raise defense spending to 5% of GDP, while Latvia is set to reach that figure in 2027.
Budgets of Lithuania and Estonia
On December 11 the Seimas of Lithuania approved the state budget for 2026, which provides for defense spending of €4.79 billion, or 5.38% of GDP. This is 43% more than planned for 2025, and represents the highest level of defense funding in the history of independent Lithuania.
"According to the planned share of GDP allocated to defense, Lithuania in 2026 will become the leader among NATO allies in terms of defense investment"
– Robertas Kaunas, Minister of National Defense
The decision of the State Defence Council envisages a long-term goal — to allocate 5–6% of GDP to defense in 2026–2030. The need for additional funding is linked to the presence of a German brigade until 2027 and plans to create a Lithuanian army division by 2030.
In 2026 Lithuania will spend €1.59 billion more on defense than in 2025; about 60% of the allocated funds will be directed to the modernization and development of the Armed Forces. In addition, the country will continue to allocate 0.25% of GDP to financial and military support for Ukraine.
Estonian expenditures and support for Ukraine
The Estonian parliament also approved the budget for 2026, which meets NATO criteria and foresees defense spending at least at the level of 5% of GDP. Compared with the current year, this is €844.5 million higher.
Estonia plans to continue providing Ukraine with assistance amounting to 0.25% of GDP, which is approximately €110.7 million; most of these funds are planned to be directed to orders for the national defense industry.
Latvia and Ukraine's figures
Latvia approved the largest defense budget in its history: for 2026 it has planned 4.91% of GDP, or €2.16 billion. It is expected that in 2027 expenditures will reach 5% of GDP, and in 2028 will amount to 4.87%.
- In 2025 Ukraine's defense spending will reach 31.1% of projected GDP, making it the world leader in terms of the share of such expenditures.
- Ukraine's draft budget for 2026 foresees funding the security and defense sector at UAH 2.81 trillion (over €57 billion), or 27.2% of GDP.
