Prime Minister Ulf Kristersson told a press conference the increase was "the next big step in the rearmament of the Swedish defence".

In March, the government announced it would increase defence spending by about 300 billion kronor ($31 billion) over the next decade, aiming to reach 3.5 percent of GDP by 2030.

Kristersson noted that Sweden was "well on our way to make that a reality".

Alongside fallout from the Russian invasion of Ukraine, US President Donald Trump has called on European NATO members to take spending to five percent of GDP. Sweden is one of many European countries to have boosted spending.

"These investments are absolutely essential in the serious times we are in," Defence Minister Pal Jonson said, adding that the Ukraine war had become "crucial" for Sweden's security.

The money would be used to buy rocket artillery, vehicles for the army, navy ships and more air defence systems.

Kristersson said "we now have information" that confirmed that the entry of Russian-made drones into Polish airspace last week was intentional.

"We know that it was Russian drones, we know that it was intentional," Kristersson said.

"This is a serious escalation on Russia's part. Probably to test NATO's capabilities," the head of government added.

Trump said last week that the entry of Russian drones into Poland may have happened by "mistake," even as the incident alarmed Europe.

Sweden broke two centuries of military non-alignment to join NATO after Russia's 2022 invasion of Ukraine, which sparked alarm in Sweden and Finland that Moscow could eventually threaten them.

After the Cold War, Sweden drastically slashed its defence spending as it focused military efforts on international peacekeeping missions.

It reversed course following Russia's 2014 annexation of Crimea, and started increasing military expenditure.

In 2017, Sweden reintroduced compulsory military service, seven years after abandoning it.