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Foreign aid from some of the world’s wealthiest nations fell to $174.3 billion last year, according to new data. It’s a historic drop that questions the viability of development assistance itself, analysts warn.
The cuts represent a 23.1% fall from the year before, according to preliminary data released 9 April by the intergovernmental Organisation for Economic Co-operation and Development, or OECD.
The figures are a measure of official development assistance, or ODA, from the members of the OECD’s Development Assistance Committee, which includes relatively wealthy governments in Europe, North America, Asia, and the Pacific.
ODA has now fallen to levels comparable to when the international community created the Sustainable Development Goals in 2015 aimed at reducing poverty and inequality .
“Never before in history have we seen such a sudden dramatic decline in ODA from one year to the next,” said Carsten Staur, chair of the DAC. “Never.”
The sharp drop is led by the United States. The destruction of its foreign aid programmes and budgets in 2025 represented three quarters of the global decline. But the cuts are across the board: 26 of 34 OECD members shrank their budgets, including the five largest providers – France, Germany, Japan, the United Kingdom, and the US.
The OECD says this year’s drop is “a major shock” to the development cooperation system itself.
“It calls into question both the fiscal space available in developing countries to sustain their long-term development, and whether the reduced volume of ODA can remain effective and maintain its catalytic role to offset these pressures,” OECD analysts wrote in an accompanying briefing.
The numbers are preliminary. The yearly figures are usually revised and finalised in December.
Here are five quick takeaways from the latest data.
Humanitarian aid falls faster
In a three-year period of deep budget contraction across donor governments, humanitarian aid may have suffered the biggest squeeze.
Humanitarian assistance, as reported by DAC countries, fell by 35.8% compared to 2024. In comparison, money for development programmes, projects, and technical co-operation dropped by 26.3%.
Already one of the smaller tranches of the aid funding pie, humanitarian aid from DAC countries added up to about $15 billion in 2025.
But that drop in development programming funding is a harbinger of things to come. This kind of funding is normally steady even in tougher times, the OECD says, but a 26.3% drop is the largest on record. As humanitarians know, today’s unresolved development challenges can spill into tomorrow’s emergencies.
”The significant decline in 2025 indicates that cuts extended beyond more volatile elements of bilateral aid and into core development programming,” OECD analysts said.
Where aid is going: self-interest over need
In a more transactional world, donor governments are prioritising national interests and geopolitical strategy over need in their aid budgets.
Countries like the UK, the US, Sweden, and Germany (now the top donor among DAC countries, according to the ODA stats) are more explicitly cutting aid funding to areas where their strategic interests are seen to be lower. Some are intentionally linking the cuts to boosted military spending.
The topline ODA numbers add more data to the trend. Ukraine alone, for example, received more development assistance ($44.9 billion) than the world’s 44 so-called least developed countries combined ($28.1 billion).
That said, bilateral aid to Ukraine actually fell, undermined by US cuts. But 23 countries still increased their Ukraine aid, and EU institutions topped up the budgets by an extra $34.6 billion.
Where did aid rise?
Cuts were nearly universal in 2025. But a handful of countries reported increases to their ODA.
This included Denmark (3%), Hungary (45.7%), Iceland (3.6%), Italy (0.03%) Luxembourg (8.9%), Norway (1.7%), Spain (10.7%), and Sweden (9.6%). Sweden, like many countries, has announced aid cuts likely to dent its stats in upcoming years.
The OECD numbers track members of the DAC donors’ club, but it’s not the full aid picture.
Countries like Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates have also given varying but generally growing amounts of aid, and a few have reported their stats to the OECD. Qatar and the UAE say they’ve both boosted their ODA by 23.4% and 55.5%, respectively. The UAE’s rise is heavily tilted by humanitarian aid for Palestine.
Aid is at a crossroads
The numbers reinforce what humanitarians already know: Foreign aid from the typical donors is falling. But there’s a deeper question beneath the stats: Is development cooperation dead?
The steep decline challenges today’s international system of development cooperation. Do developing countries have the resources to reduce poverty, and is aid from wealthier countries the vehicle to do it?
Staur of the OECD says countries need to find a new narrative for ODA. Assistance saw a similar drop in the 1990s – though spread over several years – where countries had to “reinvent a new rationale” for their foreign aid after the Cold War, Staur said. Countries are at a similar pivot point today.
“In the past 30 years, ODA has been very much aligned to globalisation, to the global economy, to free trade, to a growth-based rationale for investment and job creation,” he said.
Today, aid exists amid an explicitly transactional environment. “We're looking at different rules for the global economy to work, and where ODA would need to find its feet in that changed global environment,” Staur said.
There are more cuts to come
Donor countries are in the middle – not the end – of a budget fall that began tipping after 2022 (but was partially obscured by Ukraine aid).
Germany, for example, became the top DAC donor for 2025, but it’s slashing budgets and cutting the foreign office department that oversees humanitarian aid.
Sweden recorded a rise in ODA, but continues to cut and redistribute its aid budget.
The United Kingdom is a top-5 donor in pure dollar terms, but has actually made deeper cuts than the US, analysts say.
For now, the OECD says it expects a further 5.8% fall in ODA budgets in 2026.
