The obligation to allocate up to 5% of GDP for defense from 2027 has become law 0 9

In February, Latvian President Edgars Rinkēvičs proposed to enshrine such an obligation. In a letter to the Presidium of the Saeima, he emphasized that it is important for Latvia to ensure a consistent increase in defense funding in the long term to implement the intentions expressed by the heads of state and government of NATO countries on June 25, 2025, in The Hague - to invest 5% of GDP in defense annually until 2035.

"Based on the current geopolitical situation and the need to strengthen the country's defense capabilities, it is necessary to ensure a predictable volume of defense funding, investing at least 5% of the projected GDP for the respective year in 2027 and in subsequent years, thus fulfilling the criteria set by NATO," the letter states.

The Ministry of Finance acknowledged that achieving this goal will require significant additional funding from the state budget in the coming years.

The department reminds that at the meeting on May 13, 2025, the Cabinet of Ministers decided to move towards allocating 5% of GDP for state defense, developing capabilities, ensuring NATO security, and providing military support to Ukraine. Thus, the budget law for 2026 already provides for additional funding for defense within the resources redistributed during the execution of the current year's state budget.

According to GDP forecasts approved by the Fiscal Discipline Council in February 2026, after the redistribution of funds, the defense budget of the Ministry of Defense will amount to 4.81% of GDP in 2027, 4.64% in 2028, and 4.52% in 2029.

To reach the 5% funding level, approximately an additional €92.1 million will be needed in 2027, €181.1 million in 2028, €258 million in 2029, and over €1.12 billion in 2030.

Parliamentary Secretary of the Ministry of Defense Liene Gatere emphasized on Wednesday at a meeting of the parliamentary commission on defense, internal affairs, and anti-corruption that it is extremely important to demonstrate to NATO allies an example of achieving a defense spending level of 5% of GDP in order to subsequently demand the same from other countries.

Deputy Secretary of State of the Ministry of Defense Uģis Norītis discussed the directions of upcoming funding at the meeting. According to him, it is important to invest in large-caliber ammunition and replenish stocks, including air defense systems.

He emphasized the need to continue the active mechanization of the brigade: currently, contracts have been signed for infantry fighting vehicles sufficient for two battalions, while NATO maneuver units provide for at least three mechanized infantry battalions.

In addition, it is necessary to continue investing in naval forces and seek opportunities to replace existing ships. It is also important to develop the potential for anti-ballistic missiles. Together with the Danish division, it is necessary to develop the infrastructure and capabilities of the division's headquarters.

Norītis highlighted the need to increase investments in drones and anti-drone systems, develop the industry and innovations, as well as infrastructure for personnel. Work on the Ādaži training ground should continue, the Baltic defense line should be improved, the Zemessardze bases should be developed, and ammunition depots should be built, he added.

The Ministry of Defense continues to strive to increase the number of the National Defense Service (NDS) to 4,000 people, which requires additional funds for equipment and salaries. It is also necessary to increase the number of professional military personnel to at least 10,000 and consider the participation of volunteers, Norītis summarized.

A representative of the State Real Estate Agency at the commission meeting noted that such changes would be a positive signal for international investors about the serious support of the defense industry by the state. He also pointed out that the situation in the Middle East could lead to an increase in construction costs.