Lithuania Tops NATO With Defense Spending Above 5% of GDP

Lithuania is allocating more than 5% of its gross domestic product to defense in 2026, making it the highest-spending NATO member relative to the size of its economy. The increase reflects Vilnius' effort to accelerate military modernization, strengthen deterrence on NATO's eastern flank, and prepare for long-term security challenges linked to Russia's military posture in the region. 

According to representatives of President Gitanas Nausėda, Lithuania already spends more than 5% of GDP on defense, with annual military expenditure reaching approximately €5 billion. Officials indicated the government's decisions will further reinforce that commitment. The report also noted that a significant share of the additional spending is financed through borrowing. 

Lithuania Leads NATO in Defense Spending

NATO's latest defense expenditure estimates place Lithuania at the top of the alliance, with core defense spending projected at approximately 5.33% of GDP in 2026. Estonia, Latvia, Poland, and Greece also rank among the alliance's highest defense spenders, while the average among European NATO members and Canada remains substantially lower. 

Lithuania's national budget allocates roughly €4.8 billion to defense this year, equivalent to about 5.38% of GDP under the government's own methodology. The increase supports one of Europe's most ambitious military investment programs. 

Funding Military Modernization

The additional funding supports the development of a full Lithuanian military division, procurement of major weapons systems, expansion of ammunition stocks, infrastructure projects, and preparations for the permanent deployment of Germany's brigade in Lithuania. Previous government plans also earmarked funding for Leopard 2A8 main battle tanks, CV90 infantry fighting vehicles, CAESAR self-propelled howitzers, air defense systems, and supporting infrastructure. 

Officials and defense planners have also argued that spending above 5% of GDP should continue beyond 2030 to ensure long-term sustainability of the capabilities currently being developed. 

NATO's New Spending Benchmark

The increase comes after NATO members agreed to adopt a broader 5% defense-related spending objective by 2035. Under the new framework, allies are expected to dedicate 3.5% of GDP to core military expenditures and up to 1.5% to broader security investments such as infrastructure, resilience, and cybersecurity. Lithuania already exceeds the alliance's core defense spending benchmark. 

For Lithuania, maintaining defense spending above 5% signals that the country intends to remain one of NATO's leading contributors relative to its economic size while strengthening deterrence along the alliance's northeastern frontier.