Lithuania plans to spend 5.25% of GDP on military next year

The Lithuanian government plans to spend 5.25 percent of GDP on the military next year, Prime Minister Gintautas Paluckas said on Thursday.

“The goal is to earmark 5.25 percent [of GDP for defence] in the 2026 budget proposal. And I believe we’ll achieve this target. I’m confident that this government, this coalition, and this Seimas will reach this goal,” he said on LRT TV.

Lithuania is looking to raise additional funds to establish a national military division and prepare to host a German brigade by 2030.

The State Defence Council decided in mid-January that the country should spend between 5 and 6 percent of its GDP, or around 12 billion euros, on defence over the next five years.

Some of the funds are expected to be sourced from economic growth, borrowing, and tax raises.

According to Paluckas, the largest share of the funding increases for the military is to come from borrowing, “in cooperation with businesses”.

“This means that it’s not the state borrowing, but companies investing in large defence infrastructure projects that do, with the state repaying them over 10 to 20 years. It’s a mixed model,” he explained.

The prime minister added that the exact breakdown of funding sources will be clear when the 2026 budget proposal is presented.

On Wednesday, the government approved the budget planning schedule for 2026–2028. Under this plan, budget negotiations will take place in the summer rather than the autumn. Additionally, ministries have been tasked with reducing their expenditures to free up funds for defence.

The Finance Ministry plans to update its 2025–2028 economic development and public finance projections by September 11 and submit the 2026–2028 budget proposal to the government by October 15.