Thomas Nilsson, head of Sweden's Must intelligence service, tells Financial Times that Russia's economy is worse than the Kremlin reports. The Kremlin manipulates statistics and may even deceive President Vladimir Putin himself about the crisis's scale. Despite the issues, Putin is expected to continue the war in Ukraine.
Thomas Nilsson, head of Sweden's military intelligence service Must, warns in an interview with Financial Times of Russia's economic crisis. He states that official figures are embellished and that inflation is closer to 15 percent, despite the Kremlin's reports of around 6 percent. Russia's GDP fell by 1.8 percent in January and February, and the central bank warns of worsening export and import conditions.
According to Nilsson, the price of Urals oil needs to stay above 100 dollars per barrel for a full year to cover the budget deficit, which has been underestimated by about 275 billion Swedish kronor. A ceasefire between the US, Israel, and Iran would worsen the situation through lower oil prices. The Kremlin systematically manipulates figures to hide the costs of sanctions and the war.
"They still have a systemic problem. It is not a sustainable growth model to produce materiel for the war that is then destroyed on the battlefield," Nilsson says. He suggests Putin may not receive accurate information: "If you have created a system like Putin's, he may not know how bad the economic situation really is."
Russia is "living on borrowed time" and faces two scenarios: prolonged decline or shock, according to Nilsson. Torbjörn Becker, director of the European Institute of Japanese Studies, believes Putin will continue the war: "He is probably prepared to prioritize away quite a few other things to keep the war going." Putin has himself admitted the economy is weak.
