The North Atlantic Treaty Organization (NATO) is a political and military alliance comprising 31 countries. The latest member soon to officially join NATO will be Sweden. NATO’s primary purpose is to facilitate cooperation among member nations, ensuring mutual defence and security. This graphic breaks down the expected defence expenditures of NATO members in 2023, using data from NATO and based on current prices and exchange rates.
Source: Visual Capitalist
NATO defines defence expenditure as payments made by a national government, excluding regional, local, and municipal authorities, specifically to fulfil the requirements of its armed forces. It requires members to spend at least 2% of their GDP on defence.
A major component of defence expenditure includes payments for active armed forces personnel as well as retired pensioners. Expenditures for stockpiling war reserves of military equipment or supplies are also included. Additionally, it encompasses expenditures for peacekeeping and humanitarian operations, as well as the destruction of weapons.
The US is by far the largest contributor to NATO’s budget. In 2023, the country accounted for $860 billion spent by the organisation, representing 68% of the total expenditure. This amount is over 10 times more than that of the second-placed country, Germany.
Spending on defence is a hot political issue in the US, where the view is that European countries have “freeloaded” on America’s expenditure to protect them, saving their budgetary spending for social support. Donald Trump has threatened to withdraw the US from NATO if European nations do not contribute “their fair share”.
For the record, in Australia, defence budget papers show spending for 2023-24 will reach $52.5 billion (2.04% of GDP), up from $49.1 billion (1.93% of GDP) in 2022-23.
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