The increase preempts the anticipated NATO spending target increase in June.

Sweden plans on increasing defence spending to 3.5% of GDP within the next five years, Swedish Prime Minister Ulf Kristersson said during a press conference on 26 March.

The announcement follows the release of the government’s Spring budget, which allocates additional funding for defence equipment, Ukraine, and addressing hybrid threats.

This will be primarily financed through loans as part of a new funding model, ensuring the government can meet the anticipated higher NATO spending target expected to be set at the summit in June. The target is anticipated to be between 3-4% of GDP, up from the current 2%.

As part of the new Spring budget, Sweden intends to purchase new defence materiel totalling SEK25 billion (USD2.4 billion) from 2025. Priority capabilities include air defence, drones, rocket artillery, personal protective equipment and ammunition. Deliveries are expected to take place between 2026 and 2028.

Along with traditional capabilities, Sweden will increase spending on addressing hybrid threats. The government is therefore proposing an additional SEK96 billion for 2025 for a new package to bolster its ability to counter hybrid threats.

Funds will be allocated to the Swedish Coast Guard to bolster its maritime surveillance capabilities, Civil Contingencies Agency and Psychological Defence Agency.

Ukraine will also receive SEK40 billion in military support this year over the original SEK25 billion. This increase will be made possible by redistributing funds from the 2026 ‘Ukraine framework’ aid initiative.