Military Budgets of Iran and Israel: How Much Do the Two Rivals Spend on Their Armed Forces?

The increase in tensions in the Middle East has coincided with a significant rise in the military budgets of Iran and Israel; however, Iran lags behind Israel in this arms race. Analysis by Radio Farda's data mining group indicates that in Iran's budget for the year 1403 (2024), a large portion of the financial resources for the armed forces is sourced not only from the main budget lines but also from crude oil quotas and the National Development Fund. Nevertheless, Israel, which receives substantial military aid from the United States, still maintains a superior military budget. In Iran's current budget, based on an exchange rate of 28,500 tomans, the budget for the Islamic Republic's armed forces is estimated at $25.3 billion, reflecting a 21% increase compared to the previous year. This figure does not include potential secret budgets, particularly related to the Islamic Revolutionary Guard Corps (IRGC). On the other hand, according to the latest estimates from Statista, Israel's military budget for 2024 is projected to be around $31 billion. The Stockholm International Peace Research Institute (SIPRI) also reported Israel's military spending last year at $27.5 billion. Meanwhile, Iran's military budget last year was $21 billion. Radio Farda's analysis further shows that the gap between the military budgets of Iran and Israel has reached its lowest point to date. In this year's budget (1403), a total of 722 trillion tomans has been allocated across various sectors for the armed forces, of which about 470 trillion tomans comes from general budget resources and another 253 trillion tomans from crude oil quotas and the National Development Fund. With the exchange rate for this year's budget set at 28,500 tomans, the dollar value of military expenditures for 1403 will be approximately $25.341 billion, which is over a 20% increase compared to the previous year. The total military budget in the line items and provisions of last year's budget (1402) was 526 trillion tomans, which, based on a hypothetical exchange rate of 25,000 tomans, equates to $21 billion. Meanwhile, SIPRI estimated Iran's military expenditures last year at $10.3 billion. If calculations are based on the average buying and selling price of the dollar in the Nima system, the value of this year's military budget for Iran would be around $17 billion, while last year's budget would be approximately $14 billion.