Estonia to Increase Defense Spending to 5% of GDP from 2026

Estonia plans to raise its defense budget to at least 5% of GDP starting in 2026, Prime Minister Kristen Michal announced.

“Our aim isclear—to make any aggression against us unfeasible,” Michal noted.

He emphasized that Russia’s imperial ambitions continue to pose a serious threat to Europe and NATO.

For reference, Estonia’s defense budget for 2025 is set at 3.3% of GDP.

Estonia Expands Military Capabilities

Estonia has been strengthening its armed forces, recently receiving nearly 50 Turkish-made Arma 6×6 armored personnel carriers and NMS armored vehicles.

In total, Estonia is set to acquire 100 armored vehicles and 130 armored personnel carriers.

At the end of January, Estonia also received its first batch of French-made 155mm wheeled CAESAR self-propelled artillery systems.

Before Russia’s full-scale invasion of Ukraine, Tallinn had planned to form two self-propelled artillery battalions. However, after deciding to establish a full-scale division, the government expanded its artillery program to include a separate battalion at division headquarters.

In June 2024, Estonia ordered 12 CAESAR self-propelled howitzers from French defense firm Nexter (part of KNDS), with an option to procure additional systems if needed.

Lithuania to Increase Defense Spending to 5-6% of GDP

On January 17, Lithuania announced plans to increase defense spending to 5-6% of GDP between 2026 and 2030.
The funding boost aims to accelerate the formation of a mechanized division.

According to the Lithuanian president, without increased defense spending and industry reforms, the division would not reach combat readiness until 2036-2040.

To meet the planned timeline, Lithuania’s defense budget will need to reach 5.5% of GDP annually during this period.