NATO has reported a significant increase in defense spending across its member nations, with a notable surge in Europe and Canada. The alliance’s latest annual report indicates that all 32 members met the 2% of GDP expenditure target in 2025, a collective response to evolving security challenges. Overall defense expenditure reached $1.4 trillion, marking a 6% rise from the previous year.
NATO Secretary-General Mark Rutte highlighted that the increased spending demonstrates allies’ recognition of the changed security environment and their commitment to collective obligations. The report shows that Europe and Canada together raised their defense expenditure by 19% in 2025, reaching $574 billion. This contrasts with a marginal decrease in U.S. expenditures, which fell from 64% to 59% of the overall NATO defense spending.
Despite the collective achievement of the 2% GDP target, significant disparities in spending levels persist among member states. Spain, Portugal, Albania, Belgium, and Canada were among those spending the lowest share of their GDP on defense, at exactly 2%. Poland, however, stands out with the highest spending at 4.3% of its GDP, followed by Lithuania, Latvia, Estonia, and Denmark, all exceeding 3%.
While overall NATO defense spending saw a 6% increase, individual country performances varied. Luxembourg, Belgium, and Slovenia recorded the most substantial year-on-year increases in absolute terms. Conversely, Hungary, the Czech Republic, and the U.S. experienced drops in their defense spending. Looking ahead, NATO countries have committed to a new target of 5% of GDP for defense spending by 2035, a move influenced by previous pressures to increase contributions.