Russia continues to insist its wartime economy is healthy and resilient, even as a senior economist was dismissed after contradicting that official narrative.
Andrei Klepach, the former chief economist of Russia’s state-controlled development bank VEB and a former deputy economy minister, was reportedly fired on Sunday following reports of remarks he made earlier this year.
Klepach presented a report to fellow economists on May 21 warning that Russia could not win a prolonged war of attrition against Ukraine and predicting a major social crisis ahead.
“In this war of attrition, we will not win the competition. We’re under the illusion that everything will collapse. It hasn’t, and it won’t. Our costs are mounting,” Klepach said in a translated speech.
“I believe Russia won’t collapse, but I’m almost certain that we’ll end up in a social crisis. We won’t collapse economically, but our lag will widen, with all the ensuing consequences,” he added.
His dismissal was directly linked to that economic assessment, according to exiled independent Russian outlet The Bell, which cited unnamed sources familiar with the matter, though CNBC could not independently verify the report.
The firing underscores the Kremlin’s zero-tolerance approach to public dissent regarding its military campaign in Ukraine, now entering nearly four and a half years of full-scale conflict.
Russian government officials pushed back firmly on any suggestion the economy is struggling, with the Russian Embassy to the U.K. telling CNBC that Russia’s fiscal position remains “significantly stronger” than that of many Western economies.
The embassy pointed to Russia’s foreign public debt of around $57 billion, describing it as “considerably less” than what the U.S., U.K., Italy, or France spend on debt servicing alone.
“The Russian economy remains resilient, as does the will of our people,” a spokesperson for the Russian Embassy to the U.K. told CNBC by email, adding that Western sanctions had failed to produce their intended results.
“On the contrary, the West, including the UK, is itself paying a substantial price for its reckless sanctions policy. British businesses have lost access to the Russian market, while disrupted supply chains and higher energy and commodity costs have imposed additional costs on the U.K. economy,” the spokesperson continued.
Anders Aslund, a Swedish economist and former senior fellow at the Atlantic Council, said news of Klepach’s dismissal came as no surprise to him.
“In an eminent analysis, he concluded that Russia could not win a war of attrition against Ukraine and that Russia was likely to end up in a social crisis as in 1917,” Aslund said via X on Sunday.
Nigel Gould-Davies, a senior fellow for Russia and Eurasia at the International Institute for Strategic Studies, described Klepach as very capable and smart, and said his dismissal revealed something telling about the state of internal debate in Russia.
“I have long said the best economic minds in Russia are the most alarmed. This again confirms it,” Gould-Davies said Monday via social media.
Russia’s wartime economy has recently come under sharper scrutiny due to Ukraine’s long-range drone attacks targeting oil refineries and delivery warehouses across Russian territory.
While Russia’s economy is technically growing, analysts warn that growth masks deep structural problems, including heavy reliance on military spending, higher taxes, and subsidized bank lending to sustain activity.
