German Intelligence: Russia Hides True Costs of War and State of Economy

Germany's Federal Intelligence Service (BND) has prepared a report indicating that the Russian Federation systematically falsifies data concerning arms expenditures and the overall financial health of the state. According to German analysts, Moscow employs methods of "creative accounting" to conceal the scale of the budget deficit from its own society and international markets. Shifting funds between sectors and classifying huge portions of spending are meant to sustain the narrative of economic stability despite the rising costs of the prolonged aggression against Ukraine. Experts point out that the Russian economy is beginning to show signs of erosion, and institutions close to the Kremlin warn of approaching stagflation. The practice of hiding military expenditures has a long tradition in Russia, dating back to the Cold War era, when the official budgets of the USSR represented only a fraction of the actual arms spending, hidden within civilian ministries. Meanwhile, on the diplomatic front, President Volodymyr Zelenskyy has launched an offensive in the Persian Gulf region. During talks with the leaders of the United Arab Emirates and Qatar, the Ukrainian leader proposed an unprecedented "fair trade." Ukraine, possessing unique, world-scale knowledge in intercepting and neutralizing Iranian-made drones (Shahed), offers technological and training support to Arab states that feel threatened by such weapons. In return, Kyiv expects deliveries of missiles for Patriot air defense systems (PAC-3), the shortage of which is becoming a critical problem for protecting Ukrainian energy infrastructure and cities. Zelenskyy noted that assistance in countering Iranian drones is possible on the condition of a ceasefire with Russia, which would allow for the transfer of technology. Iranian Shahed-136 drones have become one of the main tools of Russian air terror since the autumn of 2022, forcing the Ukrainian army to develop novel electronic and kinetic warfare methods. The operational situation indicates some successes for the Ukrainian army – for the first time since the offensive in Kursk Oblast, Ukrainians have managed to regain more territory than Russian forces have captured in the same period. Kyiv also reports high air defense effectiveness, reaching 86 percent during mass drone attacks. Despite these advances, the Russian side is changing tactics, creating new challenges for the defenders. In the shadow of ground fighting, a Russian tanker was detained in Belgium, which is part of tightening sanctions on the aggressor's energy sector. Simultaneously, within EU structures, a debate is ongoing about the pace of Ukraine's integration, where some ambassadors express skepticism towards the concept of a "simplified" accession path for Kyiv.