Three small countries on NATO’s eastern flank, Estonia, Latvia and Lithuania, are each spending more as a share of their GDP on defence than almost any other country in the alliance. A glance through Baltic procurements reveals all three are undergoing a fairly serious modernisation process.
It is certainly no secret that NATO and its Baltic members Estonia, Latvia, and Lithuania are taking the threat of Russian invasion seriously. Having been robbed of independence before, and having resistance to Soviet occupation in the 1940s and early 1950s as part of their national identity, fear of their large Russian neighbours has always driven post-independence defence policy. But since Russia’s 2022 invasion of Ukraine, the three countries have greatly increased their defence budget and embarked upon a buying spree.
Defence budgets have skyrocketed in all three countries and the Baltic states have well exceeded the NATO guidelines, unlike many others. Estonia’s 2026 defence budget weighs in at EUR 2.4 billion. This may not seem much, but it is 5.4% of GDP, as Estonia is small. Latvia’s 2026 defence budget is just over EUR 2.15 billion, some 4.7% of GDP, and over three times its 2020 spending. Lithuania, the largest of the three countries, is spending EUR 4.79 billion, nearly 5.4% of GDP. This is, in fact, a Baltic spending spree.
What is this money going towards? Some commonalities emerge. The three countries have only small navies and air forces; this budget is being spent largely on land forces. All three are spending on reserve and paramilitary organisations, discussed in a separate article on partisan defence. All three are spending money on infrastructure and training areas to host allied troops. All three are aiding Ukraine, buying drones, and buying ISTAR capabilities. Significant funds are going on construction of the Baltic Line defensive belt of fortifications. But these are only part of the substantial outlay. It is worth examining the major procurements by country.
One salient feature of Estonia’s effort is the extent to which they are emulating Finland in procurement. There is some commonality in equipment, and Estonia has procured Swedish CV9035 infantry fighting vehicles (IFVs), Finnish Patria Pasi (XA-180) armoured personnel carriers (APCs), and Korean K9 self-propelled howitzers (SPHs). The latter will supplement existing procurement of a further 12 French Caesar Mk1 SPHs, with 24 in total to be service.
Another key feature is the great extent to which Estonia is stockpiling ammunition, to the tune of EUR 3.4 billion over a five-year period. This is a lot of ammunition for a small military, and it indicates that the strategy is to fight a protracted engagement. Furthermore, the ammunition storage is dispersed around the country, both for protection and to be close to dispersed forces, putting some credence into the ‘rifle behind every tree’ defence tactic as well as holding some ammunition for its allies to use.
Major systems procurements for 2026 include 3 Lockheed Martin M142 HIMARS multiple rocket launchers (MRLs), to supplement the three already in use. Estonia has ordered total of 9 Hanwha (South Korea) Chunmoo MRLs, for delivery in 2027. The 182 ATACMS 610 mm missiles included in the HIMARS deal, and an unknown number of CTM-290 600 mm missiles for the Chunmoo easily gives the Estonian Army the deep strike capability to target the St Petersburg metropolitan area, and even the shorter-range rockets can endanger major Russian road and rail targets.
There is not much of an Estonian navy, but investment in Blue Spear anti-ship cruise missiles (ASCMs) that can easily reach St Peterburg’s harbours means that Estonia can help turn the Baltic Sea into a NATO lake. Finally, significant expenditures are being made on air defence, with Estonia taking delivery of its first German IRIS-T SLM medium-range air defence (MRAD) system on 22 June 2026.
Latvia pursues a broader procurement policy, spreading their budget around a wider number of countries and vendors. A non-trivial EUR 50 million is earmarked for drone procurement. The largest single procurement category (over EUR 300 million) is IFVs, much of which is being spent on GDELS-Santa Barbara Systems (Spain) ASCOD HUNTER IFVs, with assembly and service by Finland’s Patria. Through the Common Armoured Vehicle System (CAVS) programme, Patria 6×6 APC deliveries are expected to continue through 2029, with the total standing at over 256 vehicles.
Although the money is largely in previous budget years, Latvia should start taking delivery of 6 US HIMARS systems in 2027. Additional tube artillery, comprising 18 Archer (Sweden) wheeled SPHs is also in the procurement pipeline. The budget contains EUR 200 million for air defence, and IRIS-T SLM systems should be delivered in 2026, based on a contract signed in 2023. Like Estonia, ASCMs are under procurement, with the Kongsberg (Norway) NSM Coastal Defence System (CDS) being announced in March 2026 as the selected system.
Lithuania has the largest defence budget of the three Baltic countries. The latter is not surprising, as some of the budget is going on infrastructure support and training areas for Germany’s 45th Panzer Brigade, which is now stationed in Lithuania. Unsurprisingly, this has led to Lithuanians procuring 44 Leopard 2A8 tanks, under a EUR 950 million multi-year contract, with the tanks to be assembled in Lithuania. This gives Lithuania its first ever main battle tank (MBT) capability, which can train alongside German allies. Another interesting purchase, perhaps a wise nod to the various small rivers and bogs of much of Lithuania, comprises 12 Leguan bridging systems based on the Leopard 2A8 tracked platform.
IFV procurement is the single largest procurement category in the 2026 budget, with EUR 375 million towards 100 Swedish CV90 MkIV IFVs as part of a larger joint NATO framework. A large order for 936 Patria 6×6 APCs is in the procurement pipeline as well, through the CAVS programme. A EUR 252 million multi-year contract for an eventual 48 KNDS (France) Caesar II wheeled SPHs was signed in December 2025. Like the other Baltic countries, deep strike capability is now part of the defence vision. In May 2026, the first eight of an eventual sixteen US HIMARS systems arrived, and under this procurement, over 800 missiles due to be delivered.
Air defence is a priority as well. The first Kongsberg (Norway) NASAMS systems were delivered in 2022, and additional systems are expected. EUR 60 million in the 2026 budget is devoted to short-range air defence (SHORAD), which will be spent on Swedish RBS 70 systems. Another interesting development is the Rheinmetall 155mm artillery ammunition plant being built as a joint venture in Baisogala, central Lithuania. An area where Lithuanian indigenous development is occurring is loitering munitions, where the firms RSI Europe and Granta Autonomy have sold systems into the Lithuanian military.
This is an active defence market that is now well-connected with its NATO allies. The Baltic states face serious external threats and are spending their budget accordingly. For many reasons, this is a region to watch closely.
