Nominal GDP is just official market exchange rate GDP.
It is calculated by dividing GDP in rials by the official market exchange rate.
What do you expect when Iran is cut off from the international trade and is under sanctions and 1$=2mln rials.
But real capacity of the economy is shown by GDP PPP which in 2025 was 1,9trln$.
In reality Iran's GDP PPP is larger than 1,9trln$ by 35% due to presence of huge shadow economy.
So real Iran's GDP PPP in 2025 was 1,9trln*1,35=2,5trln dollars and GDP PPP per capita with shadow economy = 26.000-27.000 PPP dollars per capita.
Iran has huge shadow economy due to:
1) low quality statistics from the official Statistical Center of Iran
2) tax evasion
3) unofficial labor
While shadow economy makes Iran's economy larger, government collects taxes only from the official part of the economy.
Same applies to military spendings: officially Iran spends 2,5% of GDP on military.
But this is only tip of the iceberg:
1) IRGC owned Khatam al Anbiya corporation finances additional defense spendings from its profits.
2) IRGC has out of the budget oil quota when they get oil, sell it abroad and use the oil money to finance additional defense spendings
3) IRGC participates in smuggling operations and use the earned money to finance additional defense spendings.
So in total Iran's defense spendings can be around 4%-4,8% of GDP according to some sources.
So with official GDP PPP of 1,9trln and 4% defense budget, Iran spends 76bln PPP dollars on defense and if we take into account specific
Military PPP of Peter Robertson who multiplies PPP defense budgets of countries like Iran by a coefficient of around 1,3, then Iran's defense spendings in 2025 were equivalent to 76bln*1,3=100bln$ .
So US spent 900bln$ on defense, while Iran spent 100bln$ equivalent.