Germany's draft 2025 budget: Downward ODA trends confirmed

Introduction

Germany’s political landscape in 2024 and 2025 has been marked by significant turbulence, with deepening divisions among major parties, the previous government’s dissolution, and a snap election that saw conservative Friedrich Merz take over the role of chancellor. These political struggles have had a direct impact on the country’s budgetary process, leading to delays in fiscal planning, and contentious negotiations over spending priorities.

The previous government failed to resolve the challenging 2025 budget negotiations, passing the task to the new administration. Germany’s new government released its 2025 draft budget on June 24, 2025, confirming a continued downward trend for ODA. This Donor Tracker Insight will cover the budget’s impact on German ODA and what that means for development advocates in 2025.

Germany’s 2025 draft budget

The 2025 draft budget remains similar to the former government's plan. The fiscal situation has improved slightly due to debt brake reforms by the coalition parties post-elections. Despite launching an infrastructure investment package and exempting defense spending from strict debt rules, the government still stresses the need for fiscal consolidation amid ongoing economic and security challenges.

Quick facts

The 2025 German federal budget stands at EUR503 billion (US$577 billion), a 6% increase from 2024, including EUR19.4 billion (US$22 billion) for ODA.

Humanitarian assistance experienced a slight increase, but fell overall by EUR1.3 billion (US$1.5 billion, -47%) from 2024. The bilateral funding budget was reduced by EUR309 million (US$355 million), representing a 6% decline. Within the bilateral budget, EUR280 million (US$321 million) was reallocated from financial cooperation towards technical cooperation (EUR189 million, US$217 million) and crisis prevention, reconstruction, and infrastructure (EUR77 million, US$88 million).

Ministerial Budgets

Compared to 2024, most ministerial budgets remain stable, with some exceptions:

• The Ministry of Defense budget rose by EUR10.4 billion (US$12 billion, 20% increase from 2024), underscoring Germany’s ongoing commitments to NATO and broader security priorities;
• The Ministry for Labor and Social Affairs received an even higher absolute increase of EUR10.9 billion (US$13 billion, 6% increase from 2024);
• The Ministry of Health saw an additional EUR2.6 billion (US$3 billion) compared to 2024 (16% increase from 2024);
• The budget of the BMZ remained unchanged at a total of EUR10.3 billion (US$12 billion), EUR941 million (US$1.1 billion) less than 2024 (-8% reduction compared to 2024); and
• The AA budget was reduced by EUR743 million (US$853 million, -11%).

Multilateral Funding

The ongoing decrease in ODA may affect Germany's role in international development and multilateral cooperation. The budget for multilateral cooperation was reduced by EUR327 million (US$375 million, -15%) to EUR1.9 billion (US$2.2 billion).

The budget draft outlined the following multilateral contributions:

• GAVI is set to receive EUR120 million (US$138 million), in line with Germany’s last pledge. Germany is expected to announce its contribution of EUR600 million (US$688 million) at the GAVI replenishment, including EUR200 million (US$229 million) of unused COVID-19 funding;
• GFATM will receive EUR370 million (US$425 million), which aligns with Germany’s annual contribution. The budget indicates that Germany will allocate EUR1 billion (US$1.1 billion) to GFATM's 8^th strategic period, representing a 23% reduction compared to the previous funding cycle. EUR50 million (US$57 million) of this new allocation will be directed through bilateral funding to GIZ;
• Funding to GPEI is set to decline by 46% from EUR37 million (US$42 million) in 2024 to EUR20 million (US$23 million) in 2025;
• UNFPA's funding is set to decline from EUR42.5 million (US$49 million) in 2024 to EUR35 million (US$40 million) in 2025 (-18%);
• IPPF's funding will decrease from EUR15.5 million (US$18 million) in 2024 to EUR15 million (US$17 million) in 2025;
• Funding for the World Bank Group budget is projected to fall by 20%, from EUR987 million (US$1.1 billion) in 2024 to EUR794 million (US$911 million) in 2025, with funding for the GFF remaining stable at EUR25 million (US$29 million);
• Funding for CGIAR is set to be maintained at EUR32 million (US$37 million);
• The contribution to WFP is cut by over half, down to pre-pandemic levels of EUR28 million (US$32 million); and
• The budget title on multilateral assistance to biodiversity, environmental and climate protection was cut by EUR99 million (US$114 million, -12%).

Despite these reductions, Germany will remain a top donor in absolute terms. The 2025 budget draft reaffirms the government's commitment to flexible responses for humanitarian and crisis needs. However, its preliminary 2024 ODA/GNI is projected by the OECD at 0.67%, below the 0.7% target, with further declines likely to come.

From a multi-year perspective, the long-term financial plan published alongside the budget indicates a gradual decline in ODA. The BMZ budget is projected to decrease consistently, stabilizing at EUR9.3 billion (US$11 billion) in 2028 and 2029. An additional planned reduction of EUR1 billion (US$1.1 billion) between 2025 and 2028 results in a 10% decrease in its budget. Although past financial planning has been slightly more conservative than final budgets, it still shows a downward trend for German ODA.

Next Steps

Parliament will debate the 2025 draft budget, with first readings on July 8–11. The budget committee will vote on it after the summer break on September 4. Meanwhile, the government will finalize the 2026 budget draft by July 30, with parliamentary negotiations starting in late September and concluding with the settlement meeting on November 13.

Looking ahead to future years, as fiscal constraints are likely to persist, it is critical for advocates to defend Germany’s ODA budget. Development finance is essential for human security—including ensuring access to basic services, fostering resilience, and supporting global cooperation.

Read more about Germany's development cooperation at Donor Profile: Germany