According to Nilsson, even higher oil revenues driven by the war in the Middle East are not helping the Russian economy. The difficult situation has also been acknowledged by Kremlin ruler Vladimir Putin himself, while criticism is coming from lower levels as well.
"Putin may not even know how bad the economic situation really is. But despite the false information he receives, it (the crisis) cannot be avoided in the end," Nilsson told the Financial Times (FT).
According to Nilsson, Russia is underestimating its budget deficit by about thirty billion dollars (about 620 billion crowns), while the central bank is also underestimating inflation. Swedish intelligence believes that inflation is closer to 15 percent than the officially reported 5.86 percent.
The Russian central bank estimates that inflation will be around 4 percent in the second half of the year - a figure that is partly shared by international forecasts, which are at 5 percent.
But the negative trend is also reflected in some Russian data. Last week, the Ministry of Economic Development there reported lower GDP growth in the first two months of this year compared to last year, specifically 1.8 percent - and Russia's leader is demanding an explanation.
The department is referring to the calendar - there were two fewer working days in January than a year ago, and one fewer in February. Putin, however, was not convinced by this explanation. "These are objective circumstances, of course, but it is obvious that trade and investment activity in the country is far from being determined by them alone," he said.
Manufacturing and industrial production as a whole, as well as systemically important sectors such as construction, were in the red, Putin complained. The latter, according to data from the statistics office Rosstat, fell by sixteen percent year-on-year in January and by fourteen percent in February.
Vladimir Boglayev, director of the Russian foundry and engineering plant in Cherepovets, also pointed to the poor economic situation, saying Russia is facing a "turbulent period" - partly due to "a complete misunderstanding of the real situation in the domestic economy by the ruling elite".
Boglayev also noted that if a country is developing at a rate below the world average, "it is a sign of its degradation".
Criticism was also voiced, for example, by Robert Nigmatulin, a member of the Russian Academy of Sciences. He noted that the country's per capita income is among the lowest in Europe and that over the past decade GDP has grown by an average of 1.5 percent, while consumer prices have risen by 77 percent.
"Everything here sucks. What about the number of employees in the industry? They say that Putin came in and got everything going... The engineering industry is collapsing - in 1999 there were four million employees and now there are 440,000. That's almost ten times less," Nigmatulin was quoted by The Moscow Times.
Nilsson said Russia's economic problems have spread to the defence sector itself, which has been a major contributor to the country's growth. As the Russia-Ukraine war unfolds, funding is shifting to drones and long-range weapons.
Apart from the drone sector, much of the military-industrial complex is loss-making, suffering from corruption and embezzlement, and dependent on loans from state banks, Nilsson added.
Russia may have to cut oil output due to Ukrainian attacks, Reuters reports
"They still have a systemic problem," Nilsson said, adding that producing material for war that is then destroyed on the battlefield is not a sustainable growth model.
Nilsson also notes that the Russian economy is not helped by the rising price of oil due to the war in the Middle East. According to his estimates, Urals oil prices need to stay above a hundred dollars (about two thousand crowns) per barrel for the whole year to cover the budget deficit there. And to alleviate other economic problems, oil needs to trade at that level for even longer.
Urals prices have hovered above 100 U.S. dollars a barrel since mid-March, falling below that mark on Monday.
Sweden believes that Russia is "living on borrowed time". "The Russian economy can only be hit by one of two scenarios - a long-term downturn or a shock. In either case, it will continue on a downward trend to financial disaster," Nilsson believes.
Stockholm is calling on European countries to approve the pending sanctions package and strengthen their support for Ukraine to further exploit Russia's weaknesses, the FT reports.
"Europe is not yet doing everything it can to damage the Russian economy. I think we have to be willing to pay a price for that. For our own good," said Swedish Foreign Minister Maria Malmer Stenergard.
Nilsson then points out that while serious problems in the Russian economy will not change Moscow's strategic goals in its aggression against Ukraine, they will affect how they can achieve them.
Klára Machková
Published 22 April 2026 18:20 GMT+2