The Latvian government has pledged at least 4% of the country’s GDP to defense next year, with plans to raise it to 5% in the following years.
Prime Minister Evika Siliņa and Defense Minister Andris Sprūds outlined the decision on Tuesday, with Sprūds saying that the additional funding would primarily be allocated to air defense systems, coastal defense, ammunition production and advancements in drone technology.
“Funding for Latvia's defense must be increased and additional military capabilities must be urgently introduced,” he said.
The Prime Minister acknowledged that reaching this level of defense spending would necessitate a review of all ministerial budgets—not only the Ministry of Defense—to secure the necessary funds.
“Ministries will have to review their capabilities and how funds are currently being spent... I see a need for the Ministry of Defense to go hand in hand with the internal affairs sector,” she said.
Over the past decade, Latvia has significantly increased its defense expenditures and is currently among NATO’s top four defense spenders, trailing behind only Poland, the U.S. and Estonia.
Greece is the only other NATO nation presently allocating more than 3% of its GDP to defense.
In 2014, Latvia’s defense budget stood at just 0.94% of GDP, only reaching NATO’s then-recommended minimum of 2% in 2018.
The distribution of Latvia’s defense spending has also seen a seismic shift: in 2014, only 7.6% of the defense budget was allocated to military equipment, with the majority directed toward wages, pensions, administration and research, LSM reported.
By 2024, this figure had risen to 37%, surpassing Latvia’s own initial projections, but the rapid increase has partly resulted from weaker-than-expected GDP growth.
The increase in defense spending follows Donald Trump’s call for NATO countries to increase their defense budgets to 5% of GDP, a target that none of the 32 member states, including the U.S., currently meets.
