The Latvian Ministry of Finance has highlighted the need for an additional 92 million euros in the national defense budget for 2027. This request aligns with a decision made by the Cabinet of Ministers on May 13, 2025, to increase defense spending to 5% of the country's GDP to meet NATO capabilities and security requirements, including military support for Ukraine. The proposed budget for 2026 has already allocated additional funding as part of the yearly budget execution process, indicating a commitment to bolster defense resources significantly in the coming years.

According to the Fiscal Discipline Council's GDP forecasts approved in February 2026, the defense budget is projected to constitute 4.81% of GDP in 2027, 4.64% in 2028, and 4.52% in 2029 without the additional funding. To achieve the legally stipulated 5% funding target, further financial allocations will be necessary, amounting to 181.1 million euros for 2028, 258 million euros for 2029, and over 1.12 billion euros for 2030. These incremental increases underscore the growing fiscal commitment to national security and defense amid evolving geopolitical threats.

The context of this budgetary decision lies in a broader agreement by NATO allies to enhance defense spending targets. Following a reaffirmation of allied commitments during the summer of 2025, Latvia, alongside other member nations, is pursuing policies that ensure adequate financial resources to maintain military readiness and meet collective defense obligations. This move reflects the ongoing challenges posed by regional security dynamics and Latvia's conscious effort to align with international defense strategies, particularly in light of the situation in Ukraine.