To ensure an increase in defense funding to 5% of gross domestic product (GDP), significant additional funding from the state budget will be required in the coming years, according to the Ministry of Finance's conclusion for the budget and finance committee, which is considering the amendment to the law on state defense funding submitted by President Edgars Rinkēvičs.
The Ministry reminds that at the Cabinet of Ministers meeting on May 13, 2025, a decision was made to move towards defense spending of 5% of GDP. Accordingly, the budget law for 2026 already provides for additional funding for defense through the redistribution of funds during the execution of the annual state budget.
According to the GDP forecast approved by the Fiscal Discipline Council in February 2026, after the redistribution of funds in favor of the Ministry of Defense, the defense budget will amount to 4.81% of GDP in 2027, 4.64% in 2028, and 4.52% in 2029.
To achieve the funding level of 5%, 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.
Rinkēvičs submitted amendments to the Saeima regarding the law on state defense funding, which provide for an increase in mandatory funding from the current 3% to 5% of GDP starting in 2027. The President requested that the bill be given urgent status.
The annotation to the bill emphasizes that the threat posed by Russia after the invasion of Ukraine has significantly changed the security situation, making the current figure of 3% insufficient. The bill also aligns with NATO's commitment to invest at least 5% of GDP in defense by 2035.
