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NATO Says All Allies Will Hit 2% Defense Spending in 2025, Except Iceland

The alliance is pivoting to a five‑percent path combining 3.5% for defense plus 1.5% for infrastructure.

Overview

  • NATO’s newly released 2025 estimates project that every member will meet the two‑percent benchmark, with Iceland excepted because it has no armed forces.
  • Germany’s final 2025 figure remains unresolved as the federal budget awaits Bundestag approval, so NATO has not published an estimate for Berlin.
  • European allies and Canada are forecast to lift defense outlays by 15.9% to about $559 billion this year, a slower rise than 2024, while U.S. spending is estimated at roughly $845 billion.
  • Total allied defense spending now stands near 1.6 trillion, according to NATO’s latest statistics.
  • Poland leads by GDP share at 4.48%, followed by Lithuania at 4.00%, Estonia at 3.38%, and the United States at 3.22%, with previously lagging countries such as Spain, Italy, and Belgium now reaching two percent.