Massoud Pezeshkian, the president of the Iranian regime, has called for a “200 percent” increase in the military budget in his first budget proposal since taking office.
Fatemeh Mohajerani, the government spokesperson, stated in a press conference on Tuesday, October 29, that “the doubling of the budget is to strengthen the country’s defense capabilities.”
Pezeshkian’s government spokesperson did not specify the total amount allocated for the 2025 military budget.
The official, non-confidential segment of Iran’s military budget
The military budget that various Iranian administrations include in the budget bill and present to parliament constitutes the official and disclosed funds allocated to the armed forces and the Ministry of Defense and Armed Forces Logistics. It does not cover classified budget items, with a large portion of the military budget going to the Islamic Revolutionary Guard Corps (IRGC).
Iran’s 2024 military budget was officially announced at approximately 4.7 quadrillion rials (around $16.49 billion at the official exchange rate and $6.8 billion at the free market rate), accounting for one-sixth of the entire year’s budget. Later, the parliament, at the request of Ebrahim Raisi‘s administration, approved an additional allocation of over 1.32 quadrillion rials (around $4.63 billion at the official rate and $1.92 billion at the free market rate) in crude oil for the armed forces to sell and supplement their budget.
Iran is the only government globally that officially allows its armed forces to participate in selling the nation’s natural resources and directly acquire a portion of them.
It is notable that these dollars are provided to military organizations at the official rate, while ordinary citizens must obtain dollars from the free market.
Iran’s military budget in international reports
Due to a lack of financial transparency and the presence of multiple military institutions in Iran, various international financial bodies, such as the Stockholm International Peace Research Institute (SIPRI) and the International Monetary Fund (IMF) in Washington, have continually attempted to approximate Iran’s actual military budget. However, these global organizations have never succeeded in providing a definitive report.
For example, SIPRI estimated Iran’s military budget at $10.3 billion in 2023.
According to reports, Iran’s 2024 military budget, based on an official exchange rate of 285,000 rials per dollar (while the free market rate currently hovers around 685,500 rials per dollar), was equivalent to $25.3 billion, reflecting a 21 percent increase from the previous year.
Based on details released so far from Iran’s upcoming budget bill, it is estimated that 47 percent of the country’s oil export revenues will again be directly allocated to the armed forces, as it was this year. This amount equates to 5.61 quadrillion rials (approximately $19.68 billion at the official exchange rate and $8.18 billion at the free market rate), while the government’s own share of these resources is only 43 percent, or around 5.09 quadrillion rials.
Beyond the country’s oil resources allocated directly to the armed forces for sale, Iran’s National Development Fund has consistently served as an accessible source to meet the government’s urgent needs, preventing it from succumbing to severe economic and military crises.
During his three years in office and in the few months since Pezeshkian’s administration began, the Iranian government has repeatedly emphasized its access to National Development Fund resources based on the approval of the regime’s Supreme Leader Ali Khamenei and has expressed gratitude for his “benevolence.”
Pezeshkian’s administration stated that it inherited a relatively empty treasury from its deceased predecessor and still lacks funds to pay wheat farmers and meet nurses’ demands, with some needs met through withdrawals from the National Development Fund.
Amid Iran’s dire economic and livelihood conditions this year—characterized by continued capital flight, persistent inflation, and a declining stock market—evidence suggests that the Iranian regime has not refrained from using secret budgets for its security operations abroad, particularly to provide financial and military support to its proxy groups.
