Latvia’s defence budget is forecast to grow significantly to nearly $1.7bn by 2028, from $1.0bn in 2023 following a multi-year trend in military spending that has increased since Russia’s invasion of Ukraine in 2022.
According to GlobalData’s Latvia Defense Market Data 2023-2033, published earlier in 2024, growth in the historic period (2019–23) amounted to a compound annual growth rate (CAGR) of 9.0%, with the projected spending in the forecast period (2024–2028) producing a CAGR of 10.5%.
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A former Soviet state, Latvia has since reorientated firmly towards the West along with the other Baltic countries of Lithuania and Estonia, now being a member of both the European Union and Nato. Latvia shares a border with Russia to the east, and Moscow ally Belarus to the south-east.
Defence procurement in Latvia is limited due to the small size of its armed forces, although it is currently procuring armoured vehicles, tactical trucks, missile defence systems, and helicopters as part of its plan for increased expenditure over the next decade, according to GlobalData.
Nato also maintains a significant presence in all Baltic states under the Enhanced Forward Presence (EFP) structure which sees a battlegroup-sized force forward deployed in host countries. As of December 2023, Canada was acting as the framework nation for Nato’s EFP in Latvia, with contributions from Albania, Czechia, Iceland, Italy, Montenegro, North Macedonia, Poland, Slovakia, Slovenia, and Spain.
Latvian Army: small, but modernising
Latvia’s land domain capability is centred on 148 CVR-T Spartan-tracked reconnaissance vehicles formerly in service with the British Army, which were provided between 2015 and 2020. In addition, the Latvian Army also operates 41 M109A50 Paladin self-propelled howitzers.
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By GlobalDataHowever, modernisation efforts in recent years also led to Latvia starting the Common Armoured Vehicle Systems (CAVS) programme, along with Finland. Other European countries, such as Germany and Sweden, have since joined the CAVS programme.
Additional land domain modernisation efforts have seen hundreds of utility vehicles acquired from companies such as Scania, Polaris, and Bombardier.
