The Great Aid Retreat: Official Development Assistance after the Record Fall of 2025

Official development assistance (ODA) from members of the OECD Development Assistance Committee (DAC) fell by 23.1% in real terms in 2025, to US$174.3 billion, the largest annual contraction on record. This paper reviews the OECD's preliminary data, sets out which donors cut and which budgets were hit hardest, and uses the 2026 Global Report on Food Crises to show how the cuts are reaching people in the most severe crises. It then assesses what a smaller, more concentrated aid system means for multilateral institutions and for foreign policy.

Key points

• DAC members' ODA fell by 23.1% in real terms in 2025, to US$174.3 billion, or 0.26% of their combined gross national income (GNI), down from 0.34% in 2024. The OECD describes this as the largest annual fall in the history of ODA [1; 2].
• France, Germany, Japan, the United Kingdom and the United States all cut their ODA in the same year for the first time, and together accounted for 95.7% of the total fall. The United States alone accounted for 75.1% of it, after cutting its ODA by 56.9% [1].
• DAC countries' humanitarian assistance fell by 35.8% to US$15.5 billion, and core contributions to the UN system fell by 27.0%, the largest annual drop in UN core funding on record [1].
• The 2026 Global Report on Food Crises estimates that humanitarian funding for food sectors in food-crisis contexts fell by around 39% in 2025, a year in which 266 million people in 47 countries and territories faced high levels of acute food insecurity [3].
• The OECD projects a further 5.8% fall in DAC ODA in 2026 and expects ODA in 2028 to remain 6.6% below its 2025 level [1].

1. The problem

Aid budgets long rose in response to crises: between 2019 and 2023 ODA grew by 32.7% in real terms as donors responded to the COVID-19 pandemic and to Russia's war against Ukraine [1]. That growth has reversed. ODA fell by 6.1% in 2024 and by a further 23.1% in 2025, leaving it 4.2% below its 2019 level [1]. The OECD notes that the 2025 contraction returns ODA to the level at which it stood when the 2030 Agenda for Sustainable Development was adopted in 2015 [1; 2].

The fall was not caused by a global recession. The OECD points out that ODA grew even in 2020, when world GDP contracted, and that the 2025 decline came in a year of GDP growth of 1.70%. It attributes the fall to political and fiscal pressures in donor countries [1]. The decline therefore reflects political choices rather than economic circumstance.

2. The evidence

A concentrated decline. Although 26 of the 34 DAC members reduced their ODA in 2025, the scale of the fall was set by a few large donors [1]. The United States cut its ODA by 56.9%, which the OECD records as the largest reduction by any provider in any year on record. Germany cut by 17.4%, France by 10.9%, the United Kingdom by 10.8% and Japan by 5.6% [1]. At 2024 prices, US ODA fell from US$65.5 billion to US$28.2 billion [1, Table 2].

As a result, Germany became the largest provider of ODA for the first time, with US$29.1 billion against US$29.0 billion from the United States [1; 2]. The margin was US$135 million, and the OECD warns that revisions before the final data are published may change the ranking [1]. Only four countries exceeded the UN target of giving 0.7% of GNI as ODA: Denmark (0.72%), Luxembourg (0.99%), Norway (1.03%) and Sweden (0.85%) [1; 2]. A few members moved against the trend, among them Spain (+10.7%), Sweden (+9.6%) and Luxembourg (+8.9%) [1].

Cuts to core programmes, not just to volatile items. DAC members' bilateral ODA fell by 26.4% to US$126.4 billion. Grants fell by 29.1%, much faster than sovereign loans (−10.3%) [1]. The most telling figure concerns development programmes, projects and technical co-operation, which exclude in-donor refugee costs, humanitarian aid and debt relief. These flows fell by 26.3%, the largest decline on record for this component, after rising by 24.2% between 2019 and 2024 [1]. The OECD concludes that the cuts "extended beyond more volatile elements of bilateral aid and into core development programming" [1].

Humanitarian assistance fell by 35.8% to US$15.5 billion. The cost of hosting refugees in donor countries, which counts as ODA, fell by 22.1% to US$23.0 billion but stayed at 13.2% of total ODA [1].

The multilateral system squeezed unevenly. Multilateral ODA fell by 12.7% to US$47.9 billion and has dropped by 21.3% since 2023 [1]. The pressure fell on the United Nations: core contributions to the UN system fell by 27.0%, driven mainly by an 87.2% cut in US contributions to the UN. Core support to the World Bank and to regional development banks, by contrast, rose by 6.4% and 11.9% respectively [1].

Where the money went. DAC countries' bilateral ODA to Africa fell by 23.9% to US$29.0 billion, to sub-Saharan Africa by 26.3% to US$24.5 billion, and to the least developed countries (LDCs) by 25.8% to US$23.5 billion [1]. Ukraine was the exception. Bilateral ODA to Ukraine from DAC countries fell by 38.2% to US$10.3 billion, but once outflows from EU institutions are included, bilateral ODA to Ukraine from DAC members rose by 18.7% to US$44.9 billion. This was the largest volume of ODA to any single recipient in any year on record, and more than all LDCs combined (US$28.1 billion) or all of sub-Saharan Africa (US$29.2 billion) received on the same basis [1; 2].

Twelve providers outside the DAC that report to the OECD gave a combined US$13.3 billion in 2025, 4.5% more than in 2024 [1]. The sum is small beside the reduction in US aid alone.

3. How the cuts reach the most severe crises

The 2026 Global Report on Food Crises (GRFC), produced by the Food and Agriculture Organization of the United Nations (FAO), the World Food Programme (WFP) and partners in the Global Network Against Food Crises, provides independent evidence of what the cuts mean where needs are greatest [3].

In 2025, 266 million people in 47 countries and territories, 22.9% of the population analysed, faced high levels of acute food insecurity (IPC/CH Phase 3 or above). About 1.4 million people in six countries and territories were in Catastrophe (Phase 5), more than nine times as many as in 2016 [3, p. xii]. Famine was confirmed in two places in 2025, parts of the Gaza Strip and the Sudan, which the report describes as a first since IPC reporting began [3, p. xii]. The report cautions that the headline total is lower than in 2024 (296 million) mainly because fewer countries were covered, not because the situation improved [3, p. 10].

The funding trend runs the other way. Humanitarian assistance to food sectors in food-crisis countries peaked at US$16.8 billion in 2022, fell by 30% in 2023 and declined again in 2024 to US$11.4 billion. For 2025 the report estimates a further fall of around 39% in humanitarian funding and a contraction of at least 15% in development assistance to these sectors. It attributes the reductions largely to cuts in the bilateral aid budgets of DAC donors, only partly offset by the international financial institutions [3, pp. 39–40].

The effects are measurable. Humanitarian agencies prioritised 114 million people out of the 179 million initially targeted in 2025. According to the 2026 Global Humanitarian Overview, as cited in the GRFC, nearly 98 million people had received some form of humanitarian assistance by December 2025, against 123 million in 2024 [3, p. 40]. Cuts are also eroding the evidence itself: the 2026 GRFC covers the lowest number of countries and territories with data meeting its technical requirements in ten years, and WFP's survey interviews fell by 30% to 800,000 [3, p. 6].

4. Analysis

The following assessments are Meridian analysis based on the evidence above.

First, the aid system is becoming smaller, narrower and more strategic. The record volume to Ukraine, set against falls of a quarter to Africa and the LDCs [1], suggests that donors are increasingly matching aid to their security priorities. That changes the character of ODA, which is meant to address need wherever it is greatest.

Second, the burden is shifting from the UN to the development banks. Donors cut core funding to the UN system by more than a quarter while increasing core support to the World Bank and regional development banks [1]. Lending institutions can stretch donor capital, but they cannot easily replace UN agencies' humanitarian operations, and the GRFC shows that the international financial institutions only partly offset the fall in food-sector funding [3]. The governance of the multilateral banks, already central to the debt debate covered in MER/26/D01, gains further weight.

Third, the retreat of the largest donor leaves space that no one is yet filling. The fall in US ODA of more than US$37 billion at 2024 prices [1, Table 2] is nearly three times the entire reported contribution of non-DAC providers [1]. Whether other states use the gap to build influence, and on what terms, is an open question that the 2025 data cannot yet answer.

5. Assessment

• The 2025 fall is the largest in the history of ODA and reaches into core development programmes, not only humanitarian and refugee spending [1].
• The cuts are concentrated among the largest donors, above all the United States, and the OECD expects further declines in 2026 [1; 2].
• Independent evidence from the GRFC links the cuts in DAC bilateral budgets to sharply lower food-crisis funding in a year when two famines were confirmed [3].
• Indicators to watch: the OECD's final 2025 ODA data, due in December 2026; the outturn against the projected 5.8% fall in 2026; and funding coverage in the Global Humanitarian Overview.

References

1. OECD, "Preliminary official development assistance levels in 2025: Detailed summary note", DCD(2026)8, 9 April 2026 (table titles added 15 June 2026). https://one.oecd.org/document/DCD(2026)8/en/pdf (accessed 27 October 2026).
2. OECD, "International aid fell sharply in 2025, says OECD", press release, 9 April 2026. https://www.oecd.org/en/about/news/press-releases/2026/04/international-aid-fell-sharply-in-2025-says-oecd.html (accessed 27 October 2026).
3. FAO, WFP and GNAFC, 2026 Global Report on Food Crises: Joint analysis for better decisions (FAO and WFP, 2026), Key findings and section 2. https://doi.org/10.4060/cd9424en (accessed 27 October 2026).