The Netherlands aims to improve military readiness and contribute more to NATO following worries about the return of high-intensity warfare in Europe and the future of transatlantic security cooperation. Faced with mounting concern regarding the stability of the rules-based international order, the Netherlands is forecasted to increase defense spending from $22.8 billion in 2024 up to $31.2 billion in 2029, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Netherlands Defense Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2029,” reveals that the Netherlands’ defense spending is forecasted to rise to $26.6 billion in 2025.

The Dutch acquisition budget ballooned from $2.8 billion in 2020 to $5.7 billion in 2024, marking a CAGR of 18.9% over 2020-24. During the forecast period (2025-29), the acquisition budget is expected to grow from $6.7 billion in 2025 to $8.0 billion in 2029 at a 4.6% CAGR, spurred by concurrent modernization programs. In the same period, the country’s total defense budget is anticipated to increase from $22.8 billion in 2024 to $31.2 billion in 2029, reflecting a CAGR of 4.1%.

Fox Walker, Defense Analyst at GlobalData, comments: “Like many NATO member states, the Netherlands has committed to spend at least 2% of its GDP on defense. The country remains just shy of this goal, but it has made significant progress­­—particularly since Russia’s invasion of Ukraine in 2022.”

One of the many reasons for the Netherlands’ increased expenditure is Dutch Prime Minister Mark Rutte’s desire to be the next secretary general of NATO. Rutte led his country during a period when defense spending was barely above 1.0% of GDP. After years of approving small defense budgets, Rutte now wants to lead the alliance at a time when some are questioning Western Europe’s commitment.

Rutte’s aspiration to become secretary general should have required him to strengthen his country’s posture to at least the bare minimum of 2%, but the Netherlands did not even achieve this goal under his leadership.

Walker concludes: “President Biden’s support for Rutte’s bid to lead NATO is somewhat surprising, especially when Estonian Prime Minister Kaja Kallas has expressed interest in the position. Rutte led at a time when his country only spent 1.2% of GDP on defense. Kallas, who is expected to further increase her country’s defense spending to 3.2% of GDP in 2024, would be a powerful voice more than capable of leading the alliance.”