Anna Hartz
Economic downturns rarely feel sudden. They build over months and years, in small changes that most people barely notice at first.
A slower factory line. Fewer trains running. Rising prices that no longer surprise anyone. By the time a government admits that something is wrong, ordinary people have usually felt it for a long time. This is the picture now forming around Russia’s economy, which Ukrainian intelligence says has entered its most serious crisis in twenty years.
Sharp Drop in Growth
According to a new assessment from Ukraine’s Foreign Intelligence Service, Russia ended 2025 with deep economic trouble, reports United24. The agency reported a sharp drop in industrial growth. It also pointed to a record federal budget deficit and growing financial strain across major parts of the economy.
Industrial output is one of the clearest signs. Russia saw steady growth of 4 to 6 percent in 2023 and 2024. In 2025, that number collapsed. Over the first eleven months of the year, growth reached only 0.8 percent. The slowdown has been especially heavy in manufacturing, which has long been a core part of Russia’s economic model.
Ukrainian intelligence also noted a steep fall in freight activity on Russian Railways. Train cargo levels have dropped to their lowest point in sixteen years. This suggests weaker exports and less demand inside the country. These issues are appearing at the same time as growing financial pressure on private companies.
Government Spending Continues to Be High
The agency said the federal budget is in serious trouble. Russia recorded a deficit of 63 billion dollars in 2025. That is larger than the deficit during the 2020 pandemic year. Government spending remains extremely high. Inflation continues to rise. To cope with the situation, Russian authorities have begun raising taxes.
Some analysts now compare the current moment to the late Soviet period, when economic problems were hidden through borrowing and short-term fixes. Ukraine’s intelligence service does not claim that Russia is on the brink of collapse. It argues instead that the country is entering a long stretch of economic instability.
Recent figures from Russia’s Finance Ministry support the warning. In January alone, the federal deficit reached 22.3 billion dollars. Oil and gas revenues fell by half. Higher taxes helped increase non-energy income, but not enough to close the gap. Since the start of the war in Ukraine, Russia has accumulated a total budget deficit of 226.2 billion dollars. The European Union says Western sanctions continue to play a major role in weakening the Russian economy.
