Policy Updates

On June 10, 2025, the World Bank released an Economic Prospects Report that projected that the global economy will slow significantly in 2025, largely due to US trade policies that disrupted international commerce and heightened global uncertainty.

The report projected that global growth will fall to 2.3% in 2025, down from 2.8% in 2024 and below the 2.7% initially forecast in January 2025. While a recession is not expected, ongoing trade tensions are contributing to what may be the weakest decade of growth since the 1960s, with economic development stagnating in many of the world’s poorest regions.

Growth in emerging markets is set to outpace that of HICs, but many low-and middle-income countries are still struggling to recover from pandemic-related losses. Slower growth will hinder countries’ ability to create jobs, reduce extreme poverty, and narrow income gaps with HICs. The World Bank suggested that halving global tariffs and mitigating trade tensions could boost growth by 0.2% by 2027 and encouraged low-and middle-income countries to lower trade barriers to stimulate their economies.

Chief Economist of the World Bank Indermit Gill cautioned in the report that without swift course correction, living standards around the world could face severe blows. The report highlighted that global cooperation is essential to support the most vulnerable developing economies through multilateral action, concessional finance, and emergency assistance for conflict-affected countries.

On June 9, 2025, Minderoo Foundation announced a pledge of AUD10 million (US$7 million) to support the development of MPAs in high-seas regions of Australia and the Pacific, starting with the Lord Howe Rise–South Tasman Sea area, which features deep-sea ecosystems including coral, seamounts, whales, and sharks.

The funding will support scientific assessments, stakeholder engagement, and MPA design in alignment with international frameworks such as the UN High Seas Treaty and the global 30x30 biodiversity target. The initiative aims to address pressures from industrial activities and to contribute to marine conservation planning in areas beyond national jurisdiction.

Incorporating a gender equity and human rights approach, the program emphasizes transparent governance, inclusive decision-making, and collaboration with governments and other partners. Minderoo’s contribution complements existing philanthropic and public funding and seeks to encourage broader support for high-seas conservation efforts.

This initiative is part of a broader strategy to inform policy and contribute to long-term ocean sustainability in the region.

On June 6, 2025, the Netherlands announced it will hold a general election on October 29, 2025 following the collapse of Dutch Prime Minister Dick Schoof’s government, which resigned after losing coalition support, triggering a prolonged campaign under a caretaker administration.

The government’s fall was prompted by deep internal divisions, particularly over contentious immigration proposals. With the coalition dissolved, the cabinet will now serve in a limited capacity, overseeing only essential governance. The unusually long lead-up to the election gives political parties time to recalibrate strategies and present clear platforms.

Key campaign issues are expected to include migration, housing shortages, climate goals, and healthcare reforms. Analysts anticipate a volatile race, with public opinion still shifting after months of political instability. The election is seen as a crucial moment that may redefine the Netherlands’ domestic and international direction.

On June 4, 2025, Dutch Foreign Minister Caspar Veldkamp was assigned temporary responsibility for the Foreign Trade and Development Cooperation portfolio, following the resignation of the PVV ministers on June 3, and the formation of a caretaker government.

Until a new minister is appointed, Veldkamp will also oversee the duties previously held by outgoing minister Reinette Klever. This interim arrangement ensures continued management of foreign trade and development cooperation under the caretaker cabinet.

On June 4, 2025, the UK government revised its ODA budget estimates for 2025–2026, reallocating previously announced funds and deepening future ODA reductions.

While a GBP500 million (US$646 million) cut to the ODA budget was announced in March’s Spring Statement, new figures reveal a GBP480 million (US$620 million) shift from core multilateral programs to BII. UK Development Minister Jenny Chapman told the IDC that this adjustment provides fiscal flexibility ahead of larger cuts: GBP4.8 billion (US$6.2 billion) in 2026–27 and GBP6.5 billion (US$8.4 billion) in 2027–28. These reductions are set to bring UK ODA to 0.3% of GNI.

Overseas posts may continue existing and humanitarian commitments, but must now justify additional expenditures. Multilateral-to-bilateral aid “rebalancing” was noted, while Chapman declined to reaffirm the GBP11.6 billion (US$15 billion) climate finance pledge. Ahead of the UN Financing for Development conference in Seville, UK. priorities include private capital mobilization, debt transparency, and programming for women and girls. The UK is reportedly resisting progress on debt relief negotiations, including proposals for a debt workout mechanism.

On June 4, 2025, Norway became the 31^st country to ratify the BBNJ —formally known as the Agreement under UNCLOS on the Conservation and Sustainable Use of Marine Biological Diversity of Areas Beyond National Jurisdiction—furthering global ocean governance efforts.

The agreement enables conserved marine protection in areas beyond national jurisdiction, which make up around two-thirds of the world’s oceans, and promotes cross-sectoral cooperation for healthier marine ecosystems.

The Norwegian Parliament unanimously approved ratification on May 26, followed by formal confirmation by the Council of State on May 27. Foreign Minister Espen Barth Eide, describing Norway’s action as proud and delighted, emphasized that strong collective engagement is essential to drive the treaty toward its required 60 ratifications.

Environmental Minister Andreas Bjelland Eriksen noted that this step supports the Kunming-Montreal Global Biodiversity Framework’s goal of protecting 30% of marine areas by 2030, and will require environmental impact assessments.

Norway also introduced new domestic legislation to align national law with the Agreement, including contributing NOK 500,000 (US$49,000) to a trust fund that supports developing countries’ participation in treaty implementation.

On June 4, 2025, new findings showed that only 21 of 195 countries party to the UNFCCC Paris Agreement have submitted updated NDCs for 2035, nearly four months past deadline with most NDCs mentioning health benefits, such as reduced air pollution, but few include systems to track health outcomes.

The GCHA reviewed 11 countries’ NDCs and found that while many reference health benefits, only the UK’s plan includes specific air quality monitoring. Kenya’s NDC aims for 100% renewable energy and a 35% emissions cut by 2035, yet does not explicitly measure air pollution benefits. Brazil’s NDC focuses on deforestation and fossil fuel transition but lacks clarity on new oil extraction and zero deforestation pledges. The US, after submitting its plan, has now withdrawn its targets, weakening global momentum.

Recent NDCs highlight varied approaches: New Zealand targets “super pollutants” but is seen as unambitious; Japan’s continued fossil fuel use has significant health impacts; Canada is phasing out coal; and the UAE is developing a national monitoring system. However, most plans fall short of the 1.5°C goal, with the UK as a notable exception.

The World Bank estimates that halving global exposure to dangerous air pollution by 2040 would require annual investments to rise from US$9 billion in 2020 to US$14 billion in 2040. Despite this, climate finance commitments remain inadequate, and the ;abbrUS exit further strains resources.

On June 3, 2025, the US Congress received a US$9.4 billion rescission request to claw back previously approved funding, with US$8.3 billion to be cut from the State Department and USAID.

The request is the first of several expected before the end of the discal year. The package includes funds already targeted by DOGE. If Congress passes the package, which requires only a simply majority, the cuts will become law.

Assistance to Europe, Eurasia, and Central Asia would be eliminated entirely. Other notable cuts included:

• US$1.7 billion cut from the Economic Support Fund, nearly half of its approved funding for 2025;
• US$500 million cut from USAID programs for MCH, HIV/AIDS, and infectious diseases;
• US$437 million cut from voluntary contributions to UN agencies, including UNICEF, UNDP, and UN Population Fund;
• US$400 million cut from the State Department's global health programs for HIV/AIDS;
• US$496 million cut from USAID's international disaster assistance fund;
• US$200 million cut from assessed contributions to the Contributions to International Organizations account, impacting UN organizations;
• US$83 million cut from the Democracy Fund's appropriated budget of US$345 million;
• US$57 million cut from the Transition Initiatives account from its appropriated budget of US$75 million; and
• US$27 million cut from the Inter-American Foundation and US$22 million from the US African Development Foundation, both around half of their respective budgets.

Congress controls the federal budget, approving annual funding for government operations, with the president needing congressional consent to defer or withhold funds. The rescinded funds can then be redirected or returned to the Treasury. Congressional committees have 25 days to review the request. After committee approval, the package moves to the House and Senate for expedited votes, where Congress has 45 days to act on the request.

The Congressional Budget Office estimates the US government is on track to spend ~US$7 trillion in 2025, with the rescission request equivalent to 0.1% of government spending.

On June 2, 2025, KOICA and GOEIC signed a US$11 million agreement to create a digital platform aimed at improving trade facilitation in Egypt, entitled “Establishment of the Digital Platform for risk-based inspection and tracking to facilitate trade in Egypt,” which will run from 2025 to 2029.

The platform will streamline import cargo inspections, enhance competitiveness, and support Egypt’s digital transformation goals. Key features include risk-based inspection systems, a laboratory information management system, and a market surveillance system.

The agreement was signed in Cairo, attended by officials from KOICA, GOEIC, and Egypt’s Ministry of Planning, Economic Development, and International Cooperation. KOICA’s Deputy Country Director stated the project will foster economic growth and sustainability by modernizing inspection and customs clearance, reducing administrative barriers, and ensuring compliance with global standards.

Egypt’s Minister of Planning, Economic Development, and International Cooperation Dr. Rania Al-Mashat highlighted the project’s role in leveraging Korean grant resources to support digital transformation and inclusive development. The initiative aligns with Egypt's commitments under the WTO Trade Facilitation Agreement and aims to accelerate and simplify conformity assessment procedures at ports, helping Egypt reach international benchmarks for trade efficiency.

On June 2, 2025, AFD signed a Memorandum of Understanding with the Essam and Dalal Obaid Foundation, Louis Dreyfus Foundation, and Sawiris Foundation to pilot a climate-smart agriculture program benefiting smallholder farmers in Egypt’s Sohag and Minya governorates.

This collaboration aims to improve agricultural productivity and resilience through tailored financial tools, sustainable practices, and market access support. AFD will also contribute through technical assistance and impact evaluation, with a long-term goal of scaling the approach nationally.