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There is concern in Israel over the emerging nuclear agreement between Iran and the United States, The Jerusalem Post reported, citing two Israeli officials who said the potential deal is seen as problematic for Israel.
According to the report, Israel maintains that Iran should not be allowed to enrich uranium under any circumstances, including for civilian purposes.
The newspaper cited two Western officials saying that while negotiations have made progress, it remains uncertain whether the talks will result in a final agreement.
A social media account with apparent access to a sensitive Iranian military site posted a video on Thursday depicting missiles fixed to an Iranian military helicopter which it said were copied from those attached to US attack drones.
The aircraft was marked with the insignia of the Islamic Revolutionary Guard Corps.
Iranian military officials in recent days have cited Iran's prowess as a strong deterrent against any US military solution to the nuclear standoff with Iran which has been repeatedly mooted by US President Donald Trump.
Iran is facing one of its bleakest economic outlooks in years, data published by the International Monetary Fund (IMF) suggests, with inflation surging, fiscal deficit growing and nominal economy shrinking—all indicators of potential long-term instability.
Iran’s real GDP is set to grow by just 0.3% in 2025, the IMF's Regional Economic Outlook for the Middle East and Central Asia published this month projected.
That’s a sharp fall in its October 2023 estimate for this year of 3%.
The revision appears to reflect the tightening of US sanctions under President Donald Trump, who has promised to slash Tehran’s oil revenues and restrict its access to international finance.
In April alone, the Trump administration imposed eight new packages of sanctions targeting tankers and trading networks that facilitate the sale of Iranian oil. Between January and April 2025, imports from China—Iran’s primary oil buyer—fell to 1.38 million barrels per day (bpd), about 7 percent below the 2024 average.
The IMF estimates both production and exports to fall by 300,000 bpd in 2025. Independent energy analytics firms such as Kpler, Vortexa, and TankerTrackers have predicted a steeper drop, as much as 500,000 bpd.
Surplus narrows, capital flees
Iran’s total exports, including non-oil goods and services, is projected to decline by 16% this year to $100 billion, according to the IMF. Imports are expected to fall 10% to $98 billion, leaving a slim trade surplus of just $2 billion, compared to $10 billion last year.
Despite running trade surpluses in recent years, capital flight remains alarmingly high.
Iran’s Central Bank estimates that $14 billion exited the country in the last nine months of 2024. That comes atop $20 billion the year before. Since 2018, when Trump introduced his so-called maximum pressure campaign against Tehran.
Currency falls, economy shrinks
Perhaps the most shocking of IMF figures is those of Iran’s nominal GDP—which reflects the size of an economy in global terms. Iran’s nominal GDP will fall from $401 billion in 2024 to $341 billion this year, according to the report.
The primary reason behind this dramatic fall is the collapse of Iran’s currency, Rial, which lost nearly half its value in 2024.
While real GDP appears relatively stable domestically as it adjusts for inflation and ignores currency devaluation, the dollar-denominated figures reveal a steep contraction.
In 2000, Iran’s economy was larger than those of the United Arab Emirates, Turkey and Saudi Arabia. Today, all three have surpassed Iran, with GDPs more than three times that of Iran in the case of the latter two.
Prices soar, pockets empty
Adjusting for ever-rising prices in Iran, the IMF has upped its inflation estimate for 2025: from 37% in its last report to just above 43% in the latest.
Iran now ranks fourth in the world in inflation, beaten by Venezuela, Sudan, and Zimbabwe only.
Several factors are fueling the surge: the rial’s collapse, restricted access to foreign reserves, excessive domestic borrowing, and rising import costs under sanctions.
What next?
Most troubling for Iran’s government could be the IMF's estimate that the country would need oil prices to reach $163 per barrel just to balance its 2025 budget. That is more than double the current global average.
In its latest budget, the administration of president Masoud Pezeshkian has assumed daily oil exports of 1.85 million bpd at $67 per barrel. But the IMF expects actual exports to average just 1.1 million bpd, indicating a substantial shortfall.
This is a familiar story. Successive administrations in Iran have run deficits amounting to roughly one-third of total public spending, plugging the gap with heavy borrowing and money printing—both of which have fueled inflation and monetary instability.
The IMF projects Iran’s gross government debt to rise to just under 40% of GDP in 2025, and a couple of points above it in 2026 — troubling figures for an economy already under severe external pressure.
Iranian officials and media have welcomed a piece of legislation required for compliance with the Financial Action Task Force (FATF), though the path to removal from the watchdog’s black list remains uncertain.
On Wednesday, the Expediency Council gave final approval to the bill that enables Iran to join the Palermo Convention, formally known as the United Nations Convention against Transnational Organized Crime. However, the legislation includes several conditions that could raise concerns for the FATF.
Officials say the Expediency Council is expected to review the second remaining bill, required for joining the Combating the Financing of Terrorism (CFT) Convention, next week.
Ratifying these two conventions is considered a final and necessary step in aligning Iran with FATF standards and can facilitate its removal from the global anti-money laundering body’s black list.
The breakthrough followed a green light given in December by Supreme Leader Ali Khamenei which allowed the Expediency Council to re-examine both bills after years amid political infighting.
Official and media optimism
“The conditional approval of the Palermo bill by the Expediency Council is an important step towards constructive engagement with the world,” government spokeswoman Fatemeh Mohajerani said in a post on X on Wednesday.
“The government welcomes the Assembly’s decision and hopes that national interests, economic benefits, and international considerations will guide the review of the CFT (bill) as well,” she added.
Iran's moderate and reformist media have also widely welcomed the move with optimistic headlines and commentaries.
“This can facilitate Iran’s return to the international financial system and its effective presence in global markets,” Donya-ye Eghtesad economic daily wrote.
“This important development has occurred while signs of progress in negotiations between Iran and the United States are also visible, and optimism about the future of Iran’s economy has increased."
Conditional ratification and FATF concerns
Despite the positive tone, the conditions attached to Iran’s ratification of the Palermo Convention—and the reservations included in the CFT bill—pose serious challenges to the country's full compliance with FATF standards.
The FATF has clearly said that Iran must ratify and implement the Palermo and CFT conventions “without undue reservations”, saying broad or vague reservations can undermine the conventions’ effectiveness and create loopholes for financing terrorism.
Speaking to IRNA after the Council’s decision, Deputy Economy Minister Hadi Khani downplayed the importance of the conditions.
“Many countries have set conditions for accepting these two conventions. Our country’s parliament, too, introduced conditions for certain articles of the conventions,” he said, adding that most of these were based on the principle that Iran would implement the conventions within the framework of its own Constitution.
Some FATF members including the United States, China, and India have ratified the Palermo Convention with the reservation that they do not consider themselves bound by Article 35(2), which involves mandatory dispute resolution by the International Court of Justice (ICJ).
Iran's Palermo legislation includes similar language, excluding ICJ jurisdiction while asserting that decisions on extradition and mutual legal assistance will be made on a case-by-case basis.
Iran has also declared that provisions incompatible with its national laws—many of which are rooted in Islamic Sharia—will not be binding. Pakistan and Saudi Arabia have accepted the Convention with similar reservations.
Moreover, Iran’s legislation explicitly states that accession to the required conventions does not imply recognition of Israel, a FATF member.
The CTF bill also includes language affirming the “legitimate and recognized right” of peoples under occupation to resist and pursue self-determination in apparent reference to the Israeli-occupied Palestinian territories.
FATF’s concerns are particularly related to the reservations included in the CFT bill. Iran's CTF bill does not accept the definitions of terrorism provided by other countries or international bodies if they conflict with its national laws and support for groups that it views as legitimate resistance movements.
Remaining on FATF black list
Iran was on FATF black lists from 2008 to 2016. In February 2020 it was black-listed again and has remained so to date.
While approval of the Palermo Convention and the CFT Convention bills is a critical step, removal from the FATF black list depends on effective implementation, not just legal ratification, and may take several years.
All countries—including allies such as China and Russia—will be obliged to apply enhanced due diligence to financial transactions involving Iran as long as it is on the black list.
In January, former Central Bank official Asghar Fakhriyeh-Kashani revealed that some Chinese banks had closed Iranian accounts to avoid FATF penalties and geopolitical analyst Abdolreza Faraji-Rad told Ham-Mihan daily at the time that Iran’s oil trade with China had to bypass the formal banking system, avoiding cash payments and relying on alternative mechanisms for the same reason.
US Representative Ro Khanna said he supports President Donald Trump’s efforts to reach a deal with Iran, urging both parties to set aside political divisions in favor of diplomacy.
“This is not a time for politics on Iran,” the Pennsylvania Democrat wrote on X. “I support @realDonaldTrump trying to get a deal with Iran. I supported the Obama nuclear deal. How about we put the interest of our nation and peace above scoring political points at every moment?”
