I'm the Foreign Minister of Sweden. Don't Overestimate Russia. [View all]

[marble falls]

I’m the Foreign Minister of Sweden. Don’t Overestimate Russia.
May 20, 2026

https://www.nytimes.com/2026/05/20/opinion/sweden-intelligence-russia-economy.html

By Maria Malmer Stenergard

Ms. Stenergard is Sweden’s minister for foreign affairs. She wrote from Stockholm.

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There are several reasons to believe that Russia has been exaggerating its economic strength. Russia has claimed that its economy grew by around 13 percent between 2020 and 2024, but by measuring nighttime luminosity, an established way of assessing economic activity in countries where official statistics are not available or cannot be trusted, we have estimated that the economy actually contracted by around 8 percent during this period.

We also believe inflation is substantially understated. In 2024, when inflation in Russia was reportedly around 10 percent, the central bank raised the benchmark interest rate to 21 percent, suggesting that inflation was higher. And Sweden’s Military Intelligence and Security Service believes that it is higher than the current official forecast of around 5 percent. This would mean Russia is overstating its purchasing power, and that its military spending capacity is weaker than it appears.

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Then there are Russia’s strategic failures in Ukraine. Advances at the front have almost ground to a halt, with Ukraine even regaining some territory. Russia’s casualty rates at the front are catastrophic. Russia has suffered 1.2 million casualties since the start of the invasion, by some estimates, an average of roughly 35,000 a month in 2025. Recruitment is increasingly expensive.

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Russia’s economy, in nominal terms, is barely bigger than the State of New York’s, smaller than that of Texas and fragile. Russian households are feeling the pinch of daily expenses, and the lion’s share of the liquid assets in the country’s national wealth fund — its financial buffer — has been drained to finance the war. The weakness in the economy shows how effective Western sanctions have already been, and why further pressure is the best way to force Mr. Putin to engage in serious peace negotiations.

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Sweden’s assessment of Russia’s reporting on its economy is that Russia is covering up the economy’s general fragility. Inside the country citizens are increasingly alarmed. Putin has acknowledged weaknesses in the economy’s performance and ordered officials to improve it. A Kremlin-friendly think tank recently warned of the risks of a systemic banking crisis this year and the economic growth forecast for 2026 was downgraded to 0.4 percent, despite rising oil prices.

We can’t change Putin’s plan to absorb Ukraine, but we can change how much it will cost him. Sanctions are effective, "Russia would need the average oil price for Urals oil to remain above $100 a barrel for the rest of the year to make a significant difference."