With Iran maintaining its stance against talks with the United States, it is pressing ahead with plans to triple its military budget for the new Iranian year in March, signaling preparations for potential military scenarios.
While officials deny that war is imminent, they acknowledge that diplomacy is no longer on the table.
Ahmad Bakhshayesh, a member of the Iranian Parliament’s National Security and Foreign Policy Committee, addressed the military budget increase which was announced in October when President Masoud Pezeshkian submitted the budget plan to the parliament for approval.
“It cannot be interpreted exactly in that way, but a significant increase in the military budget means that we are not negotiating and negotiations are not on our agenda,” Bakhshayesh told Ruydad 24 website.
Fatemeh Mohajerani, the government spokesperson, had announced a 200% increase in the military budget during a press conference in October saying that the purpose of the is move was to "strengthen the country's defense capabilities."
The budget for Iran’s armed forces was 7,220 trillion rials in last year’s budget bill. Given the exchange rate defined in that budget (330,000 rials per dollar), Iran’s military budget the last year could be estimated at $15.7 billion.
Based on this, the allocated budget for Iran’s armed forces in the coming year will likely be around 21,660 trillion rials. Given the exchange rate defined in the new year budget (570,000 rials per dollar) Iran’s military budget could be estimated at $46 billion.
The announcement follows increasingly aggressive rhetoric from Supreme Leader Ali Khamenei and senior commanders of the Islamic Revolutionary Guard Corps (IRGC), who have repeatedly signaled readiness for military confrontation.
On Tuesday, IRGC Aerospace Force Commander Amir Ali Hajizadeh said another attack on Israel, dubbed True Promise III, is in the cards.
“Iran’s third attack on Israel, True Promise 3, will definitely take place, but officials have planned for it and will use it strategically—we will not waste it,” Hajizadeh said.
He also warned that an assault on Iran’s nuclear facilities would trigger widespread conflict in the region.
Hajizadeh’s comments came after US President Donald Trump threatened Iran with an Israeli military strike if it refused to halt its nuclear program.
Meanwhile, officials the Pezeshkian administration, who previously advocated diplomacy, have shifted their stance, aligning with Khamenei’s hardline position against negotiations with the US—a stance he emphasized in a speech earlier this month.
“Today, in terms of hard defense and military threats from enemies, we have no concerns or problems,” Khamenei also said in one of his recent speeches.
The new year’s budget bill projects 1.75 million barrels of oil exports per day, with 420,000 barrels allocated to the military—equivalent to 24% of total exports. In monetary terms, the armed forces will receive €11 billion worth of oil, up from €4 billion in the previous year.
This nearly threefold increase means the military’s oil revenue will exceed the government’s by 520 trillion rials ($565 million).
Hajizadeh acknowledged that the military buildup is a response to growing tensions. “War conditions don’t always mean attacking—we must also prepare for being attacked,” he said, adding that heightened tensions have secured increased government funding.
Iran’s two previous attacks on Israel cost an estimated 1,380 trillion rials ($1.5 billion)—or 16 million rials ($17) per citizen. Meanwhile, over 60 million Iranians—70% of the population—rely on government food coupons for essential goods, yet the budget for these subsidies has been cut by 33%, dropping from €16 billion to €12 billion for the next year.
At the same time, the government lacks the funds to finance the food coupons and has resorted to withdrawing from the National Development Fund with the Supreme Leader’s approval.
With military spending surging, funds for vital imports—including medicines, infant formula, and livestock feed—have been slashed, driving up prices. Even before the next fiscal year begins, over 400 Social Security-covered medicines have already seen price hikes.
At least one third of Iranians are already living below the poverty line while workers strikes continue demanding unpaid wages.
