Andrei Klepach, a prominent Russian economist, was dismissed after delivering a frank evaluation of Russia's economic situation, highlighting the country's struggles and the inevitability of a social crisis.
The economic landscape of Russia has taken a dramatic turn following the dismissal of Andrei Klepach, the chief economist at the state-controlled development bank VEB.RF. Klepach, who had held the position since 2014, was fired days after his scathing remarks about Russia’s economic state were widely reported.
In a speech delivered in May, Klepach candidly discussed the economic pressures Russia faces due to the ongoing war with Ukraine. His remarks, which were first reported by The Moscow Times, painted a bleak picture of Russia’s economic future, suggesting that the country is falling behind both China and the United States, and in some respects, even Ukraine.
Klepach’s Controversial Remarks
Klepach’s speech was a rare acknowledgment from a senior Russian economist of the country’s mounting economic struggles. He warned that the pressures on Russia’s economy due to the war would inevitably lead to a social crisis that would erupt “when no one particularly expects it.” He also dismissed expectations of an imminent Ukrainian economic collapse, stating that a prolonged standoff with Ukraine would not lead to Russia’s victory.
“We will not win this competition in a war of attrition with Ukraine,” Klepach said. “We have an illusion that everything will collapse there. It hasn’t collapsed, and it won’t. Our costs are growing.” These comments directly contradicted Vladimir Putin’s claims that Moscow was successfully weathering the economic pressures of the war and that Ukraine’s economic exhaustion was only a matter of time.
The Fallout from Klepach’s Dismissal
VEB.RF did not offer a reason for Klepach’s firing. However, an acquaintance of Klepach told the business outlet Vedomosti that his departure from the bank was “connected to his personal, harsh assessments of the country’s economic and political development, which cannot possibly align with the corporation’s position.” The independent Russian outlet The Bell reported, citing sources, that Klepach was fired on orders from the Kremlin and that his dismissal was directly linked to his May address.
Klepach’s dismissal highlights the Kremlin’s growing insistence on loyalty within Russia’s upper ranks. Reports suggest that Putin has increasingly surrounded himself with officials reluctant to challenge his views. Alexandra Prokopenko, a former adviser to the Russian central bank and a fellow at the Carnegie Russia Eurasia Center, described Klepach as a respected economist who was unafraid to voice views that diverged from the official line.
The State of Russia’s Economy
Russia’s economy is facing its most difficult period since the start of Putin’s full-scale invasion of Ukraine in 2026. The country is strained by massive wartime spending, Western sanctions, and Ukraine’s growing ability to strike at Moscow’s oil and gas industry. In the first four months of 2026 alone, Russia’s budget deficit hit 5.87 trillion roubles ($81 billion), well above the government’s 3.79 trillion rouble target for the entire year.
Some of Putin’s closest advisers have privately warned him that the current level of wartime spending is becoming unsustainable. Recently, Ukrainian strikes have hit dozens of warehouses belonging to Wildberries, Russia’s largest e-commerce retailer, destroying billions of dollars’ worth of stock. The attacks have raised questions about the company’s financial stability and dealt a severe blow to thousands of independent sellers who depend on the platform for their livelihoods.
Putin has given no indication that he is prepared to scale back the war or rein in spending. Instead, the Kremlin has sought additional revenue by raising taxes on smaller businesses and putting pressure on oligarchs to contribute more towards the war effort. Russia’s finances have been bolstered by this year’s surge in oil prices after the US war in Iran, providing Moscow with billions of dollars in additional revenue and helping cushion some of the mounting economic pressure.
