Russian state bank VEB fires chief economist who warned Russia was losing 'war of attrition' with the West

Dismissal after rare critique

Andrei Klepach, chief economist at Russian state development bank VEB since 2014, has been dismissed after a speech he delivered on 21 May at the Nikitsky Club, a forum of economists, academics and government officials at the Moscow Exchange, became public in Russian media last week. VEB, which finances state projects, confirmed that Klepach was no longer its chief economist but did not give a reason. Klepach also confirmed his departure to Reuters. The independent Russian outlet The Bell reported, citing sources, that he was fired by order from above and that the dismissal was directly linked to his May speech. TASS reported that a successor has been selected and will be appointed soon.

A source told the business publication Vedomosti that Klepach's departure was "linked to his personal, harsh assessments regarding the economic and political development of the country, which cannot align in any way with the position of the corporation." Alexandra Prokopenko, a former advisor to the Central Bank of Russia, described Klepach as one of Russia's most respected macroeconomists, known for assessments that can differ from the official position. Klepach had worked at the economy ministry for 10 years before joining VEB.

"We are falling behind"

In his speech, titled "The Russian Economy and Geopolitical Challenges," Klepach said Russia was losing the technological and economic competition globally, not only to China and the United States but, in some respects, to Ukraine as well, attributing this to Western financial support for Kyiv. He noted that Ukraine's economy, though partially devastated and facing a demographic disaster, was nonetheless surviving.

We will not win the competition in this war of attrition. We have the illusion that everything there (in Ukraine) will collapse. It has not collapsed and will not collapse. Our costs are mounting.

He warned that a social crisis could arise at a moment difficult to anticipate, and that while the economy would not collapse, Russia's lag would continue to grow with all the resulting consequences. He also criticized excessive dependence on China and what he called uncoordinated monetary, budgetary and industrial policy, saying the quality of governance was deteriorating. According to public polls he cited, the quality of health was deteriorating and the scientific and technological sector was very uneven.

Mounting economic pressures

The Russian economy faces pressure from military spending, Western sanctions, and Ukrainian strikes on energy and logistics infrastructure. After record growth rates in 2023-2024, the Russian economy retreated in 2025, and growth rates remain below those of the United States and Ukraine. In July, the Russian central bank suggested the economy might not grow at all this year. Repeated Ukrainian attacks on Russian oil refineries and warehouses of top online retailer Wildberries have created supply shocks, raising inflation risks and public unease.

In the first four months of 2026, Russia's budget deficit reached 5,870 billion rubles, approximately $81 billion, already exceeding the full-year target of 3,790 billion rubles set by the authorities.

President Vladimir Putin has said the economy is stable despite what he called external attempts to undermine it. According to British press reports, some advisors close to Putin have warned in private discussions that the current pace of war spending is becoming difficult to sustain. The Kremlin has not indicated any intention to reduce the military effort, instead seeking additional revenue through tax increases on smaller companies and pressure on other sectors.