According to the Chief of General Staff, the deployment of new technical equipment must continue in 2025.Continue reading
The Hungarian government will spend HUF 1,752.3 billion (EUR 4.2 billion) on defense in the 2025 budget. As a result, defense spending will not only reach two percent of GDP, again meeting NATO’s expectation, but will also guarantee the continuation of the robust force development of recent years, according to an analysis by the Oeconomus Economic Research Foundation.
The analysis points out that the amount spent on defense is very high, even by NATO standards, but questions how long it will be enough. As Donald Trump is about to take over the presidency in the United States, the issue of increasing defense spending, which the Republican president had campaigned for during his previous term, could come up again.
According to some sources, Trump may even push for spending at five percent of GDP, while European allies would move towards 3-3.5 percent at most, given the extra economic burden this would entail.
Alongside support for Ukraine, this is expected to be a central theme of the NATO summit in The Hague in June.
In the Hungarian budget, in addition to the HUF 1,752.3 billion (EUR 4.2 billion) mentioned above, almost HUF 200 billion (EUR 485.1 million) will be allocated to military education and sports, bringing the total to HUF 1,939.3 billion (EUR 4.7 billion). For comparison, last year the Hungarian government spent a total of HUF 1,985.3 billion (EUR 4.8 billion) on defense, including the Defense Fund, which is HUF 46 billion (EUR 111.5 million) more than the 2025 amount. Thus, although this year’s defense budget is 2.3 percent less than in 2024, compared to the HUF 225 billion (EUR 545.7 million) budget in 2010, the resources available have increased 3.5 times in real terms by 2025. This means that in 2025, Hungary will still spend more than two percent of GDP on defense, once again fulfilling its obligations as a NATO member.
Percentage breakdown of Hungary’s defense spending in 2024: 4.6% for infrastructure, 23.7% for operations and maintenance, 23.8% for personnel, and 47.8% for equipment procurement and research and development. Source: Oeconomus Economic Research Foundation
According to the Stockholm International Peace Research Institute (SIPRI) database, Hungary has spent 2.1per cent of GDP on defense from 2023. NATO estimates that the percentage breakdown of Hungary’s defense spending in 2024 was as follows: 4.6% for infrastructure, 23.7% for operations and maintenance, 23.8% for personnel, and 47.8% for equipment procurement and research and development. The latter is quite an outstanding achievement, given that NATO expects allies to spend at least 20% of their defense budgets on equipment acquisition and development. If NATO’s estimate is correct, Hungary would be the second largest procurement spender in the Alliance after Poland in 2024.
However, the Hungarian government has not always spent so much on defense, although Hungary was not the only one in NATO that did not reach the two percent threshold. In 2014, no other country in the then 28-member alliance, apart from the United States, the United Kingdom, and Greece, met this commitment.
Annual evolution of the Hungarian defense budget. Source: Oeconomus Economic Research Foundation
In 2016, the government announced the Zrínyi Defense and Military Development Program, aiming not only to modernize the Hungarian defense forces and purchase new equipment, but also to rebuild the country’s military industry.
In addition to the cooperation with Turkish, American, and several European companies, the German company Rheinmetall has proved to be a key partner in both equipment procurement and defense investments.
Through the establishment of German-Hungarian joint ventures, it now has some kind of manufacturing and research center at four locations in the country. Among these, the ammunition and explosives plant in Várpalota (western Hungary) and the Lynx infantry fighting vehicle production unit in Zalaegerszeg (also in western Hungary) are especially worthy of mention.
The acquisition of Leopard 2A4 and Leopard 2A7 and “Gidrán” armored fighting vehicles, the purchase of Panzerhaubitze 2000 self-propelled guns and Lynx chassis-mounted Skyranger anti-aircraft guns, KC-390 military transport aircraft and H225M helicopters, as well as the ELM-2084 radars and the NASAMS air defense system, have not only renewed the Hungarian military’s equipment, but also added new capabilities. With the acquisition of the license of the Czech arms manufacturer CZ and the introduction of the Carl Gustaf and Spike anti-tank missile systems, the Hungarian army’s small arms and anti-tank capabilities have also been renewed.
The aim of the development of the Hungarian defense industry is not only to supply the army, but also to sell the equipment and ammunition produced in Hungary on the international market.
The emerging Hungarian defense industrial complex has become a key strategic sector of the national economy and an increasingly important contributor to economic growth.
Furthermore, the budgetary resources allocated for defense in 2025, will allow the continuation of the force development program for all armed forces. According to the Ministry of Defense, the modernization of equipment for soldiers, the creation of command and control conditions for troops, the development of the air force and air defense and airspace control capabilities, and infrastructure projects such as the creation of a hangar complex at the Szolnok airbase will be priorities this year.
Via Oeconomus Economic Research Foundation, Featured photo via Honvédelem.hu