In the annual report released by the Secretary-General of the Atlantic Alliance today, it was estimated that Portugal spent 1.46% of its GDP on military expenses last year.
This figure places the country below the NATO target of 2% of GDP and ahead of only five other NATO member countries: Canada (1.45%), Slovenia (1.37%), Luxembourg (1.30%), Belgium (1.29%), and Spain (1.24%).
The largest portion of Portugal’s defense spending is allocated to personnel costs, with the government having spent 58.6% of the roughly 4 billion euros invested in the sector. This amount is the highest since at least 2014, when defense investment stood at 2.263 billion euros.
However, the proportion of spending on personnel is now less significant compared to ten years ago, when it represented 81.3% of the investment.
At that time, Portugal also had more military personnel – around 30.7 thousand, compared to the estimated 24 thousand for 2024.
Following personnel spending, expenditures on equipment account for 19.5% of the total investment, more than double the 8.4% allocated in 2014.
Nevertheless, Portugal was the third NATO country to spend the least on equipment in percentage terms, only ahead of Canada (17.8%) and Belgium (15.2%).
Approximately 18% of the Portuguese government’s defense budget was dedicated to operations, maintenance, and other expenses (up from 10.2% in 2014), with the remaining 3.9% directed towards infrastructure (a significant increase from 0.1% in 2014).
On Wednesday, the Ministry of Finance announced its intention to request the European Commission to activate a clause allowing defense-related expenses, up to a limit of 1.5% of GDP, to be exempt from being counted against the primary net expenditure ceilings imposed by the Medium-Term National Structural Budget Plan (POENMP) for 2025-2028.
Similarly, the statement added, defense expenses up to the 1.5% of GDP limit will not be included in the assessment of compliance with the reference value for the deficit (3%).
“This decision was reached in consensus with the main opposition party, having consulted with the Socialist Party in this process,” the government stated.
