The Latvian Ministry of Finance has announced that an additional 92 million euros will be necessary for the 2026 budget in order to increase defense spending to 5% of GDP. This move comes in light of a decision made by the Cabinet of Ministers on May 13, 2025, which set the goal for military expenditures directed towards national security, NATO capabilities, and military support for Ukraine. The budget adjustments are expected to be made within the framework of reallocating funds in the annual state budget execution process.

According to forecasts from the Fiscal Discipline Council, the defense budget is projected to constitute 4.81% of GDP in 2027, 4.64% in 2028, and 4.52% in 2029. To achieve the mandated 5% funding level, a total of 92.1 million euros is earmarked for 2027, 181.1 million euros for 2028, 258 million euros for 2029, and over 1.12 billion euros for 2030. These incremental increases are part of a broader strategy discussed among NATO allies to enhance defense spending significantly by summer 2025.

The call for an increase in defense spending is in part a response to intensified security challenges in the region and the ongoing military situation in Ukraine, reflecting a shift in the Baltic states' defense policies in alignment with NATO directives. As Latvia seeks to bolster its military capabilities, the government is prioritizing funding allocations to ensure it meets the requirements set forth in international agreements, particularly with the backing of allies such as the United States.