The Budget Cuts Tracker

The US numbers in this publication are based on the February 26, 2025, announcement that the US administration intends to cut US 'foreign aid' by ~US$60 billion. This affects funding that covers multiple years, with many programs still receiving some amount of obligated funding; therefore, this is a likely overestimate the immediate effects on US ODA in 2025. We are working to update the Budget Cuts Tracker to take this into account as more granular information on projected cuts becomes available.

Tracking Development Budget Cuts

Given the rapidly shifting ODA landscape across DAC donors, this new Development Budget Cuts Tracker closely follows cuts in ODA with frequent updates and analysis so you can stay ahead of the curve. Find more detail on the latest trends below, along with visualizations to compare figures across markets.

Over the next weeks, we plan to add more analysis to this Tracker, including on how these cuts will affect different sectors and priorities. Let us know if you have any suggestions by emailing [email protected]

How much is ODA projected to fall in 2025 and 2026?

Between 2019 and 2023, ODA was on a slow but steady upward trajectory. Recent announcements mean that this trend is expected to shift.

In 2023, the latest year for which official data is available, the 17 largest DAC donors provided US$213.13 billion in ODA (making up over 95% of total recorded ODA from all DAC donors). In 2025, our projections suggest that ODA from these donors will fall by a total of US$74.02 billion. The biggest drivers of this decline are cuts from the two largest donors, the US and Germany. Across 12 other markets, including France and the UK, ODA is expected to decline due to a combination of budget cuts, reduced in-donor refugee costs, and reduced GDP growth. Small expected ODA increases in three markets, namely Japan, South Korea, and Italy, will not be able to cover the losses.

ODA is projected to further decrease in 2026.

How are individual donors' ODA levels projected to change?

Click on each chart to explore projected changes in ODA at the donor level.

We have summarized major announcements on budget cuts below. Over the next weeks we will continue to update this analysis, including the latest insights on how these cuts will affect different sectors and priorities.

A note on in-donor refugee costs

Under OECD DAC rules, donors can count assistance provided to refugees in their own country for the first year after arrival as ODA, known as "in-donor refugee costs" IDRCs. These costs cover temporary sustenance such as food, shelter, primary schooling, and health, but exclude other less-critical services such as integration, skills development, or job market support.

Since 2015, and particularly after Russia's full-scale invasion of Ukraine in 2022, IDRCs have risen significantly. In 2022 and 2023, they accounted for 14-15% of total ODA from DAC countries, more than doubling from 2021 levels.

Among the 17 largest DAC donors in 2023, Ireland recorded the highest proportion at 52% of ODA as IDRCs, followed by Switzerland and the UK (each 28%), and Italy (27%).

The OECD initially allowed IDRCs to be counted as ODA to reflect the financial burden of hosting refugees and share responsibility with LMICs that host most of the world's refugees. However, the substantial increase in IDRCs as a component of ODA has drawn criticism.

Concerns have been raised that IDRCs are not additional to ODA but instead divert resources from other development challenges, allowing donors to allocate more funds domestically while still meeting ODA commitments. This trend is evident in countries like the UK, Sweden, and the Netherlands, which have redirected ODA resources from other development programs to cover increased refugee assistance costs as a result of a high number of Ukrainian refugees arriving in these countries.

With ODA budgets expected to shrink in many donor countries, persistently high levels of IDRCs risk putting additional pressure on scarce resources for global development needs. There are still uncertainties about IDRCs across DAC donors in upcoming years, but the UK and Netherlands have already given some indication of upcoming trends:

• In the UK, if the per-head refugee costs remain at current levels, IDRCs could reach approximately GBP3 billion ( US$3.8 billion) annually. With the UK's ODA set to decrease to 0.3% of GNI by 2027, as announced by the Prime Minister in February 2025, IDRC could constitute about 33% of the total ODA budget.
• While the Dutch government had announced to cap IDRCs at 10% of ODA, this will only become effective from 2027 onwards. In 2025, IDRCs are expected to still take up 26% of ODA.

In addition to overall declining ODA levels, there is a risk that ODA for core development purposes might be cut even further.