The two percent benchmark is seen as a crucial indicator of NATO commitment, and was adopted in 2014 as an appropriate spending level to be achieved by 2024. At the time, only the United States, Greece and the United Kingdom were in compliance.
The report, which NATO released on Wednesday, noted that Germany's military outlay was 1.57 percent of its gross domestic product, and that Canada's was 1.45 percent.
Germany's spending was cited by President Donald Trump as a reason, earlier this year, to transfer about 12,000 troops from the country.
The U.S. troop presence in Poland would be increased under Trump's plan, and the NATO report indicates that Poland dedicated 2.30 percent of its GDP to defense.
The United States led the 30 NATO nations in defense spending, relative to GDP, with 3.87 percent, followed by Greece, Britain, Romania, Estonia, Latvia, Poland, Lithuania, France and Norway.
The total spent on defense by NATO nations was about $1.03 trillion in 2020, the report said, a 4.3 percent increase over the previous year.
Countries on NATO's eastern flank, bordered by Russia and formerly military partners with the Soviet Union, significantly increased their military spending since Russia's 2014 annexation of Ukraine's Crimea region.
Hungary, for example, saw its annual percentage of defense spending increase annually by double digits since 2014, including a 30.64 percent increase in 2019.
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