Russian economy faces 'financial disaster,' Sweden's spy chief warns as Moscow hides true deficit
on Google
Russia is manipulating economic statistics to convince Ukraine's allies that its economy has withstood sanctions and heavy military spending, Sweden's military intelligence chief Thomas Nilsson told the Financial Times in an interview published on April 20.
The assessment comes as Moscow benefits from higher oil revenues linked to the U.S.-Israeli war against Iran. Nilsson said the Russian economy remains fragile despite rising prices.
According to Nilsson, Russia is understating its budget deficit by about $30 billion, while the Central Bank is underestimating inflation. Swedish intelligence believes inflation is closer to levels implied by a 15% key interest rate rather than the officially reported 5.86%.
Sweden estimates that Russia would need Urals crude prices to remain above $100 per barrel throughout the year to cover its budget deficit. Prices would need to stay at that level even longer to offset broader economic problems.
Stockholm believes that Moscow is "living on borrowed time," Nilsson said.
"The Russian economy can only enter one of two scenarios: long-term decline or shock. Either way, they will continue on a downslope to a financial disaster," he added.
Russian President Vladimir Putin earlier instructed the government to take measures to revive the economy, warning of contraction after two consecutive months of decline.
"If you have created a system like Putin has, he might not know how bad the economic situation really is. But even with the false info he gets, you ultimately can't run from all of this," Nilsson said.
After GDP growth slowed to 1% in 2025 from 4.9% in 2024, Russia's economy has weakened further this year. The Economic Ministry reported GDP contracted by 1.8% over the past two months.
The Russian president highlighted sluggish economic performance twice in April. In late March, he also called for what he described as a "return to a path of sustainable economic growth."
