Page 23 - Iran OUTLOOK 2025

increased their involvement in Iran's startup ecosystem. This growing engagement with technology-driven enterprises represented a strategic pivot towards innovation and knowledge-based economic development. The trend signalled a broader recognition among established companies of the importance of supporting emerging businesses and fostering technological advancement within Iran's economy.
7.0 Budget & Debt
• 7.1 National budget
In the fiscal year 2024-2025, Iran's budgetary allocations reflected significant shifts in national priorities and economic management. The total budget of 2,462 trillion tomans (IRR 24,620,000 trillion) represented the first fiscal framework under the country's seventh quinquennial development programme, setting the tone for medium-term economic planning.
Defence spending emerged as a dominant component, with an allocation of 722 trillion tomans ($16.7bn), comprising 25% of the total budget. This allocation marked a 20% increase from the previous year, highlighting the government's prioritisation of military capacity despite broader economic challenges. This substantial increase in defence spending occurred against the backdrop of an official inflation rate of approximately 35%, raising questions about resource allocation during periods of economic strain.
To address budgetary constraints and generate additional revenue, the government implemented significant price increases across essential utilities. Natural gas, electricity and water prices saw a 35% rise, directly affecting household expenses. This measure, combined with a 50% increase in targeted tax revenue, put additional financial pressure on Iranian citizens who were already grappling with high inflation.
These budgetary decisions reflected the complex trade-offs facing Iranian policymakers as they attempted to balance strategic priorities with fiscal sustainability. The combination of increased military spending, utility price adjustments and higher tax targets demonstrated the government's approach to managing fiscal challenges whilst maintaining strategic investments in defence capabilities. However, this strategy also highlighted the growing burden on ordinary citizens, who faced both increased living costs and higher tax obligations amidst persistent inflationary pressures.
23 IRAN OUTLOOK 2025 www.intellinews.com