Overview of the 2024‑2025 ODA Decline
The Organisation for Economic Co‑operation and Development (OECD) reported that official development assistance (ODA) from the Development Assistance Committee (DAC) fell to $174.3 billion in 2025, a 23.1 % drop compared with 2024. This marks the largest annual decline ever recorded and the second consecutive year of reduced aid flows.
Bilateral aid to the least‑developed countries (LDCs) slipped by 25.8 %, while assistance to sub‑Saharan Africa fell by 26.3 %. The OECD notes that the contraction extends beyond volatile items such as in‑donor refugee costs, signalling a broader pull‑back in development financing.
Drivers Behind the Sharp Drop
United States’ Contribution to the Decline
The United States accounted for roughly three‑quarters of the total ODA reduction. Its aid fell by 56.9 % year‑on‑year, the steepest volume decline ever recorded for any DAC donor. In absolute terms, the cut removed tens of billions of dollars from the global aid pool.
Shifts Among Other DAC Members
Germany, the United Kingdom, Japan and France together with the United States made up 95.7 % of the overall decline. Notably, Germany became the largest DAC donor for the first time in 2025, delivering $29.1 billion in ODA. Meanwhile, eight DAC members increased their contributions, illustrating a divergent pattern among wealthier economies.
Sector‑Specific Impacts
Humanitarian Assistance
Humanitarian ODA dropped by 35.8 % to $15.5 billion, marking the second straight year of decline after five consecutive years of growth (2019‑2023). The reduction raises concerns about the capacity to respond to crises such as natural disasters and conflict‑driven displacement.
Development‑Program Funding
Funding for development programmes, projects and technical cooperation—excluding donor‑side refugee costs, humanitarian aid and debt relief—fell by 26.3 %, the largest recorded decline for this component. Analysts warn that such cuts could undermine long‑term capacity building in recipient countries.
Implications for Developing Countries
The OECD warns that the aid squeeze threatens the fiscal space of low‑income nations, limiting their ability to invest in health, education and infrastructure. Moreover, the catalytic effect of ODA—where modest aid unlocks larger private or domestic financing—may be weakened, potentially slowing progress toward the Sustainable Development Goals.
Looking Ahead: Projections and Uncertainties
OECD projections point to a further 5.8 % decline in DAC ODA for 2026, assuming current trends continue. This forecast does not yet incorporate the additional strain posed by the ongoing crisis in the Middle East, which could exacerbate funding gaps. Policymakers are urged to monitor aid levels closely and explore complementary financing mechanisms to safeguard development outcomes.
