Lithuania said Wednesday it would raise its defence spending to 2 percent of gross domestic product (GDP) next year to meet a NATO target amid security concerns over neighbouring Russia.

The government of the Baltic state formally endorsed a rise from the current 1.8 percent of GDP to 2.006 percent for 2018.

"In the light of the current global security situation, it is important that each NATO member demonstrates its commitment to the Alliance and meets the defence spending target," Defence Minister Raimundas Karoblis told AFP.

Under the 2018 draft budget widely expected to be approved by parliament later this year, defence spending will reach 872 million euros ($1 billion) in the eurozone nation of 2.8 million people.

"For the first time in history we will meet our NATO obligations," said Prime Minister Saulius Skvernelis.

US President Donald Trump has laid on the pressure for European NATO allies to hike their defence budgets, saying they do not pay enough for their security.

Lithuania is expected to be among only eight NATO allies to meet the benchmark next year, alongside the United States, Greece, Britain, Poland, Romania, and fellow Baltic states Latvia and Estonia.

Karoblis said his "main priorities include the modernisation of Lithuanian armed forces, investment in modern defensive weaponry, infrastructure development and increasing military staff."

Earlier this year, NATO sent around 1,000 troops each to Estonia, Latvia, Lithuania and Poland to reassure its eastern flank where officials have been unsettled by Russia's actions in Ukraine and Syria.

Under the draft budget, Lithuania expects to run a surplus of 0.6 percent of national output in 2018.