Military spending by NATO’s 32 member countries increased by 20% in 2025 compared to 2024, according to the alliance’s annual report released on Thursday.
European allies and Canada spent a record $574 billion on defence in 2025, equivalent to 2.33% of their combined GDP – their highest level in more than a decade.
Since 2014, these countries have more than doubled their annual defence budgets, with a real-term increase of 106%.
The United States allocated $838 billion to defence in 2025, slightly lower than the $850 billion spent in 2024. That year, the US accounted for 52% of NATO’s total GDP and contributed 60% of its combined defence spending in nominal terms.
Overall defence expenditure across NATO in 2025 is expected to exceed $1.4 trillion.
The year also saw the return of Donald Trump to the US presidency. During his second term, Trump pushed for significant increases in defence spending among NATO allies, hinting at the possibility of the US exiting the alliance.
At the June summit in The Hague, members pledged to raise defence spending to 5% of GDP by 2035—3.5% for core defence and 1.5% for broader defence and security.
In 2024, only three countries met the 3.5% GDP target: Poland (4.3%), Lithuania (4%), and Latvia (3.74%), with Estonia close behind at 3.42%. However, Spain, Portugal, Canada, Belgium, and Albania exactly fulfilled the 2% target set in 2014.
