Poland is set to lose its position as a leader in NATO defense spending, with projections indicating that by 2027, all three Baltic states will surpass Poland in military expenditures. According to reports from “Rzeczpospolita,” Poland’s planned defense budget will be nominally lower than the previous year.
At the NATO summit in The Hague in 2025, member states committed to allocating 5% of their GDP for defense by 2035, with 3.5% designated for “hard defense” and the remaining 1.5% for critical infrastructure protection, civilian population safety, and defense industry development. The increase in spending is particularly pronounced on NATO’s eastern flank.
By 2027, all three Baltic states are expected to allocate at least 5% of their GDP to defense. Lithuania and Estonia plan to maintain their 5% GDP target, while Finland aims to boost its budget by approximately €600 million, reaching €7 billion. The Czech Republic targets 2% of GDP, and Slovakia and Hungary do not foresee significant increases.
Poland’s defense budget is projected to be 198 billion zł, nearly 2 billion zł less than the plan for 2026. A larger discrepancy arises when comparing these expenditures to GDP. Assuming Poland’s economy grows by around 4% this year, the defense spending as a percentage of GDP will fall below the 4.5% planned for 2026.
Germany Increases Defense Spending
Meanwhile, Germany is ramping up its defense expenditures. Including a special fund, Berlin plans to spend nearly €140 billion on defense, which amounts to over 3% of GDP—marking the highest level since the Cold War.
The acceleration of defense spending in Europe gained momentum following Donald Trump’s second term. In 2025, NATO European members and Canada spent 20% more on defense than the previous year. Poland attributes the lower budget plan for 2027 partly to financing purchases through the EU’s SAFE instrument. When asked why the defense budget will be smaller, Deputy Prime Minister and Minister of Defense Władysław Kosiniak-Kamysz stated that in reality, it would be larger, as purchases financed through SAFE would be exempt from VAT.
