Portugal is developing a carefully phased plan to gradually raise its defence spending to 5% of GDP by 2035, in line with NATO’s new target, while maintaining fiscal responsibility, Prime Minister Luis Montenegro announced on Monday.
Speaking at a national defence conference, Montenegro emphasised that the government’s approach will involve small, manageable annual increases that ensure a credible upward trajectory without undermining public finances.
“Portugal aims to achieve this target through gradual increases that are compatible with sound budget execution,” he said. “We’re confident our economy will generate the wealth needed to support these investments while benefiting from their long-term returns.”
At a recent NATO summit in The Hague, member states agreed to raise the alliance’s collective defence spending goal to 5% of GDP over the next decade, comprising 3.5% for core defence spending and 1.5% for dual-use infrastructure and strategic investments. The policy will be reviewed in 2029.
Montenegro stressed that both Portugal and Europe must enhance their defence capabilities and move toward greater strategic autonomy, especially in light of shifting global threats.
Given its expansive coastline and one of the world’s largest exclusive economic zones, Portugal plans to prioritise strengthening its maritime and air capacity.
The government has already announced that defence spending will reach 2% of GDP this year, four years ahead of Portugal’s initial timeline, marking a significant milestone.
“This goal is ambitious, but the real challenge lies in its implementation rather than in its financial impact,” Montenegro said.
Despite progress, Portugal remains among the NATO countries with the lowest defence expenditures relative to GDP. In 2024, defence spending was estimated at €4.48 billion, or 1.58% of GDP.
Still, the government remains committed to fiscal prudence. It has pledged to maintain budget surpluses for the next four years and reduce its public debt ratio, after recording a surplus of 0.7% of GDP in 2024.
Reuters/s.s