Fatih Yurtsever*
At the NATO Summit held in The Hague in June, member states agreed on a highly ambitious goal: to raise defense spending to 5 percent of GDP by 2035. For Turkey, this decision adds a new layer of complexity to already difficult questions about the economy, national security and domestic politics.
The government supported the new target without hesitation. Officials were quick to point out that Turkey already meets the earlier 2 percent threshold. In 2024, defense spending reached $40.6 billion. The figure is set to increase to around $46 billion in 2025.
To meet the NATO goal, future defense budgets would have to surpass $66 billion annually, and possibly more as GDP grows. Experts warn that reaching this level could require either serious cuts to public spending or major new tax revenue.
The government’s Medium-Term Program for 2025 had planned for a gradual reduction in defense spending as a share of the economy. That roadmap has now been set aside.
Even after adjusting for inflation, the proposed 2025 defense budget represents a 165 percent increase compared to the previous year. The government appears determined to stay in line with NATO’s expectations, despite strong economic headwinds at home.
Striking a balance between defense and development
Economists say the key issue is how much the country is willing to trade future growth for immediate defense expansion. Increased defense budgets could put pressure on other critical areas like education, healthcare and infrastructure. Some experts also caution that borrowing to fund such a large rise in spending could push up Turkey’s risk premium and drive away foreign investors.
The current account balance could also come under strain. A significant share of advanced defense technologies still depends on foreign suppliers. This raises the risk that defense spending could widen Turkey’s twin deficits — the gap in both the budget and the trade balance. The government’s short-lived proposal to introduce new taxes on credit card use and legal services, later withdrawn after public backlash, showed how politically sensitive the issue has become.
What role can the defense industry play in the economy?
Supporters of increased military investment argue that the sector has already started delivering results. Turkey’s defense exports grew by nearly 30 percent in the first five months of 2025. Localization in production has reached over 80 percent, easing foreign dependence and helping domestic industry.
Even so, economists are divided on whether defense spending can support broader economic growth. A study published in 2023 by Dr. Luqman Saeed found that a one-point increase in the defense share of GDP reduced overall growth by more than one point. He concluded that prioritizing military spending over social programs could increase inequality and hurt long-term development.
Ankara surrounded by regional tensions
Turkey’s neighborhood remains volatile. Although the Syrian civil war formally ended with the fall of the Bashar al-Assad regime, tensions persist in parts of the country. The brief but intense military confrontation between Iran and Israel earlier this year has left the region on edge despite a ceasefire. Meanwhile, the war in Ukraine continues to unsettle the Black Sea region, where Turkey shares maritime borders.
In response to these challenges, Turkey maintains the second-largest army in NATO. Defense analyst Professor Ferda Halıcıoğlu says the increase in defense spending is a natural reaction to worsening conditions around the country. The government plans to strengthen its air defense with the “Steel Dome” system and expand investments in missile programs, drones and naval forces.
After the summit, President Recep Tayyip Erdoğan said Turkey is among the closest countries to meeting the NATO target. His remarks were widely shared in domestic media, where pride in the national defense industry continues to grow.
Politics and public perception
Defense policy has become a core theme in domestic politics. The ruling Justice and Development Party (AKP) frequently showcases defense achievements during election campaigns. Polls suggest that nearly half of the electorate believes a change in government could stall key defense projects.
Still, public support for defense modernization does not necessarily translate into approval for cuts to social services. With inflation still high and the cost of living rising, many citizens may begin to question the balance between national security and household pressure.
Concerns over transparency and patronage
Since 2017 defense procurement has been managed under the direct authority of the presidency. Critics argue that this structure leaves room for favoritism. Large contracts have often been awarded to companies with ties to the ruling party. This has sparked concerns that defense policy may be driven not only by security goals but also by political calculations.
The government defends its centralized approach as a means of ensuring efficiency and national independence. But calls for greater transparency continue from both the opposition and civil society groups.
Changing dynamics within NATO
Despite its higher spending, Turkey’s share of NATO’s overall defense budget has declined. Countries like Poland and Estonia now devote more than 3 percent of their GDP to defense, and Germany and France have also raised their budgets significantly.
This trend could shift the balance of power within the alliance. Turkey remains an essential player, but future influence may depend less on spending levels and more on diplomacy, technology and international cooperation.
Next stop: the 2026 NATO summit in Turkey
As Turkey prepares to host the next NATO summit in 2026, it faces a difficult balancing act. It must fulfill its alliance obligations without creating instability at home. Whether increased defense spending will deliver long-term benefits or lead to deeper fiscal strain remains an open question.
What is clear for now is that Turkey’s path toward 5 percent will have consequences far beyond the defense sector. The outcome will shape the country’s economy and politics for years to come.
* Fatih Yurtsever is a former naval officer in the Turkish Armed Forces. He uses a pseudonym due to security concerns.