Germany’s foreign intelligence service, Federal Intelligence Service (BND), has accused Moscow of understating the economic toll of its war in Ukraine, estimating that Russia’s 2025 budget deficit is significantly higher than officially reported. In a LinkedIn post, the BND said the actual federal deficit stood at 8.01 trillion roubles, compared with the official figure of 5.65 trillion roubles, or 2.6% of GDP. The agency claimed the shortfall was about 2.36 trillion roubles ($30.45 billion) greater than acknowledged by Russian authorities.

The BND said Western sanctions were having a “clear effect” on the Russian economy, compounded by sharply lower oil and gas revenues due to falling global energy prices. According to the agency, Russia has been forced to sell oil at steep discounts amid sanctions and pressure from the United States on key buyers. It also estimated that Russia’s consolidated budget deficit, including regional accounts, widened to 8.3 trillion roubles in 2025, or 3.9% of GDP — more than double the level recorded in 2024.

The Kremlin dismissed concerns about deteriorating public finances, describing falling revenues and a widening deficit as “routine difficulties” that could be managed thanks to overall macroeconomic stability. Russia’s Finance Ministry has not publicly responded to the BND’s assessment. Although global oil prices have recently risen following U.S. and Israeli strikes on Iran, Reuters calculations suggest the rebound remains insufficient to balance Russia’s budget.

Pic courtesy: google/ images are subject to copyright