VEB Chief Economist Fired After Warning Russia Cannot Win 'War of Attrition'

Andrei Klepach, who served as chief economist at Russia's state development corporation VEB.RF for 12 years, has been fired, according to The Bell, which cited sources familiar with the matter. His dismissal follows a stark warning he delivered in a report earlier this year about Russia's economic prospects amid the war.

Klepach presented his assessment during a May meeting at the Moscow Exchange's Nikitsky Club, though it only drew wide attention this past weekend after the Russian service of The Moscow Times published excerpts from the report.

A blunt warning

In the report, Klepach said Russia is losing ground not only to China and the United States but in some respects to Ukraine as well. He acknowledged Ukraine's severe demographic and economic difficulties but argued that Western financial support has been key to the country's continued survival despite these hardships.

He stated plainly that Russia will not win the competition in this war of attrition, rejecting the notion that Ukraine's collapse was imminent — saying it hasn't happened and won't, even as the costs to Russia keep growing.

Klepach also pointed to Ukrainian strikes on Russian infrastructure, Western sanctions and high domestic interest rates as factors squeezing future growth and discouraging technological investment. He said he does not believe Russia will collapse economically, but expects the country to face a social crisis and fall further behind, with consequences that will follow.

Circumstances of the dismissal

An anonymous source told The Bell that Klepach, described by some as one of Russia's top macroeconomics experts, was dismissed on Sunday after VEB.RF's leadership received a call "from above," suggesting the decision came from the Kremlin. A second source directly tied his firing to the remarks he made in May. VEB.RF has not commented on the reported dismissal.

Before joining VEB.RF, Klepach spent a decade at Russia's Economic Development Ministry, serving as deputy minister from 2008 to 2014 alongside officials including Central Bank Governor Elvira Nabiullina and Defense Minister Andrei Belousov.