World

Underreported inflation and the deficit: how Russia “paints a rosy picture” of its economy

Swedish intelligence claims that Russia systematically manipulates economic statistics.

This was reported in an interview with the Financial Times by the head of military intelligence and security
, as reported by "Komersant Ukrainian". 

The goal, he said, is to create the impression that the economy is withstanding sanctions and military spending, and to influence the position of Ukraine’s Western allies.

The actual state of the economy

According to Swedish intelligence estimates:

• the Russian economy is in a difficult situation,
• it has not recovered even despite rising oil prices.

Key factor:

• to stabilize the budget, the price of Urals crude must exceed $100 per barrel for an extended period.

Contradictions in official data

Officially, Russia’s GDP contracted by 1.8% in January–February, with inflation at around 5.86%.

However, according to Thomas Nilsson’s estimates, the actual decline is deeper, and inflation may be closer to 15% (the level of the key rate).

The BND also believes that Russia is underreporting its budget deficit by $30 billion.

Signs of systemic problems

Intelligence points to:

• potential risks of a banking crisis,
• the economy’s dependence on state funding.

The problems are already affecting the defense sector.

The state of the military-industrial complex

According to Nilsson:

• the Russian military-industrial complex is unprofitable,
• it depends on loans from state-owned banks,
• and suffers from corruption.

At the same time, resources:

• are being redirected to key areas
  (in particular, drones and long-range weapons).

Two scenarios

Swedish intelligence sees only two possible outcomes:

• long-term economic decline,
• or a sudden financial shock.

In any case, the economy is heading toward a crisis.

Political Context

According to Thomas Nilsson, the Kremlin is using the negotiations as “political theater,” and Russia’s strategic goals remain broader than those officially stated.

Among its possible ambitions:

• control over the Black Sea coast,
• particularly Odessa,
• and even broader territorial claims.

What this means for the war

Economic problems:

• will not necessarily change Russia’s objectives,
• but they will limit its capabilities.

This will affect:

• the scale of military spending,
• the pace of weapons development,
• and its ability to wage a protracted war.

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