In 2025, Portugal recorded its largest annual increase in defense spending of the last decade
Analysing the annual trend in expenditure since 2015, it is clear that Portugal had never before increased its investment in this area so significantly in a single year.
Between 2024 and 2025, Portugal recorded the largest annual increase in defence spending of the last decade, raising investment to €6.1 billion and meeting NATO’s 2% of GDP target for the first time.
According to the annual report published by NATO, whose summit is taking place on Tuesday and Wednesday in Ankara, the capital of Turkey, Portugal’s defence spending last year stood at around €6 billion, compared with €4.4 billion in 2024, representing an increase of around €1.6 billion in a single year.
Analysing the annual trend in expenditure since 2015, as set out in the same report, it is clear that Portugal had never before increased its investment in this area so significantly in a single year.
The second-largest ‘jump’ occurred between 2023 and 2024, with expenditure rising by €919 million.
Although it remains among the NATO countries that invest the least in defence (the Alliance average is 2.77% of GDP), in 2025, Portugal was the 12th ally to have increased its expenditure the most compared with the previous year.
According to the Minister for National Defence, Nuno Melo, the country will arrive at the next summit with 2.01 per cent of GDP allocated to this area of sovereignty, a target set by the Alliance more than ten years ago.
Portugal is thus following the trend seen in most European countries and Canada, against a backdrop of reduced investment by the United States of America (USA) in NATO and following the Alliance’s last summit, in The Hague, the Netherlands, having set a new target of 5% of GDP by 2035 (3.5% for ‘pure defence expenditure’ such as the armed forces, equipment and training; and 1.5% for investments such as infrastructure and industry).
Most of Portugal’s investment continues to be allocated to personnel costs, which account for around 45% of total investment, down from 54.7% in 2024.
In second place is the ‘other’ category, at 31.38%, which includes expenditure on ‘operations and maintenance’, research and development, and ‘expenditure not covered by the other categories’.
This is followed by expenditure on equipment, which rose from 15% last year to 21%, and on infrastructure, which accounts for 2.15% of the total.
The NATO summit will take place in Ankara, the capital of Turkey, a country where Portugal currently has two replenishment vessels under construction: the NRP Luís de Camões and the D. Dinis, due for delivery in 2028.
Furthermore, earlier this year, Nuno Melo travelled to Turkey on board a KC-390 aircraft to explore business opportunities and potential partnerships, including a visit to the well-known company Baykar, which specialises in the development and production of drones used in theatres of operations such as Ukraine.
At a time when the US is calling for a strengthening of NATO’s European pillar and strongly criticising certain allies, namely countries such as Spain, Italy and the United Kingdom, which have chosen not to make their military bases available for offensive operations against Iran, Portugal has maintained a cooperative stance while preserving positive relations with the US administration.
The country has even been praised by Donald Trump’s administration, particularly regarding the use of Lajes Air Base in the Azores, and the transatlantic alliance could even be strengthened should Portugal choose the US F-35s to replace the F-16s – a decision not expected to be finalised at this summit.
European companies, such as Saab, are also vying for the contract, using the argument of strengthening the EU’s strategic autonomy as their trump card. In this context, Portugal has applied to the SAFE European loan facility with a proposal worth €5.8 billion, which includes the procurement of frigates, satellites, armoured vehicles, air defence systems, artillery systems, drones and ammunition.
Support for Ukraine will also be on the allies’ agenda. Last month, the Portuguese government approved a resolution authorising expenditure of up to around €130.4 million to support Kyiv this year.
