The economy of Russia is weaker than official figures suggest and could enter a “long-term decline” or even a major economic shock, warns the head of military intelligence services in Sweden.
In an interview given to Financial Times, Thomas Nilsson stated that Moscow is facing serious difficulties in sustaining the war economy, despite a temporary respite generated by the increase in oil prices, against the backdrop of tensions in the Middle East.
“The Russian economy has only two scenarios: long-term decline or a shock,” said Nilsson, in a sharp assessment.
According to this, Russia would need the price of Urals oil to exceed 100 dollars per barrel for at least a year to cover its budget deficit — and even more to solve structural problems.
“It is not a sustainable model of growth to produce war equipment that is subsequently destroyed on the battlefield,” the Swedish official pointed out.
The war economy begins to creak
The defense sector, the main engine of recent growth, is already showing signs of fatigue. Funds are being redirected towards unmanned systems and long-range weaponry, as the conflict evolves.
Outside of the drone industry, however, a large part of the Russian military-industrial complex is unprofitable, affected by corruption and embezzlement, and dependent on loans from state banks.
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