Global Outlook on Financing for Sustainable Development 2025

Since 2015, the wealth gap between low-income countries and high-income countries has been deteriorating by 1.1% annually. Rising debt burdens and limited access to sustainable financing have worsened inequalities, jeopardising decades of progress in health, education, and climate resilience. 

Global challenges from the green and digital transitions to geopolitical tensions and conflicts can exacerbate geo-economic fragmentation, leaving low-income countries even further behind.

The estimated amount of annual finance needed to achieve the SDGs in developing and emerging countries surged by 36% from 2015 to 2022, in part due to extra needs created by climate change, yet resources only grew by 22% over that period. The resulting annual financing gap has increased by 60%, from USD 2.5 trillion to USD 4 trillion. Climate change, localised conflict and geopolitical uncertainty – which disproportionately affect developing countries – continue to drive financing needs.

Official development assistance (ODA) is a vital source of development finance, but at USD 223 billion in 2023 it is too small to fill the financing gulf. Along with improving domestic tax revenues and remittance flows, better aligning global investments with development objectives could make a big difference. Already 21% of global financial assets are held in developing countries, where they have the potential to contribute to social and economic progress. Even a minor rebalancing of investment priorities in the rest of the world, with some regulatory adjustment, could have a significant impact on flows of capital to development in poor countries. Other effective steps could be to adjust a portion of the fuel and energy subsidies to fit with environmental goals or set conditions to attract investment that is socially responsible and benefits local communities.