Barely two months into 2024, there are strong indications that Iran will face major challenges in sustaining a reasonable economic development path this year. The economy desperately needs investment, but there are only limited prospects of the latter given the continuation of harsh US sanctions and low odds of a diplomatic breakthrough with the west.

Moreover, the Ebrahim Raisi administration’s new budget does not generate confidence that the state will be able to provide sufficient resources for the economy to thrive. In fact, many of the projections for revenue based on the draft budget for the coming Iranian year (Mar. 2024-Mar. 2025) do not...