After a contentious debate, Iran’s parliament approved the 2025 budget proposal, which features a 200% increase in military funding, tax changes, and higher gasoline prices.
On Tuesday, 146 out of 246 lawmakers supported the budget during a session, according to the state-run Mehr News Agency.
However, this approval is not final; the budget will undergo review by special committees as a “bill,” and it may take months to become law.
Experts say that Tuesday’s approval is merely an endorsement of the budget’s outlines, although it marks a significant step for President Masoud Pezeshkian.
In remarks aired on state television, Pezeshkian highlighted that his government’s budget focuses on growth, employment, and justice.
While Pezeshkian aims to address the country’s economic crisis, he faces major challenges, primarily Western sanctions, which complicate his ambitious plans for the Iranian people.
The Iranian government has proposed a 200% increase in the military budget for the upcoming fiscal year, starting in March 2025, amid escalating tensions with Israel.
Government spokesperson Fatemeh Mohajerani announced this significant increase during her weekly press conference, linking it to “the tension imposed by Israel in the region.”
However, she did not specify the exact military expenditure for the next year, as Iran typically refrains from providing precise figures on its military spending, especially concerning activities linked to the Revolutionary Guard.
Most of Iran’s military budget is allocated to the Revolutionary Guard, responsible for defending the regime, according to the official IRNA news agency. The remaining funds are divided between the General Staff of the Armed Forces and the regular army.
Iran supports armed groups in the region, notably Hezbollah, which has been engaged in open conflict with Israeli forces since last month after a year of cross-border exchanges. Iran also backs groups in Iraq and Yemen.
According to the Stockholm International Peace Research Institute, Iran’s military spending was approximately $10.3 billion in 2023, excluding the Revolutionary Guard’s share.
In comparison, Israel’s military budget rose by 24% to $27.5 billion in 2023.
Although Pezeshkian stated that his government “consulted with various lawmakers and experts” when drafting the budget, concerns about rising gasoline prices have sparked fears of public unrest.
Discussions among parliament members have not explicitly mentioned an increase in fuel prices, but the budget proposal leaves that possibility open.
Tehran lawmaker Hossein Samsami predicted a potential 40% rise in gasoline prices in the upcoming budget bill. Fellow lawmaker Hossein Ali Haji Delighani remarked that the government’s stance on the price increase remains unclear.
Meanwhile, Gholamreza Dehghan Nasrabadi cautioned that raising gasoline prices could trigger social and political unrest under current economic conditions.
Gholamreza Tajgardoon, head of the Budget Consolidation Committee, urged lawmakers to “amend the budget instead of rejecting it outright.” He noted that the committee would remove provisions conflicting with existing laws.
Last week, the government revealed that the production cost of gasoline is around 80,000 Iranian rials per liter, excluding the cost of crude oil.
The Iranian rial has fallen to record lows against the dollar, with inflation rising by 33% in 2023, according to a previous report from the German news agency, dpa.
