Andrey Klepach, the chief economist at state development corporation VEB.RF, has been dismissed from his post following public remarks warning that Moscow risks losing an economic “war of attrition” against Ukraine and the West.
The Fall of a Kremlin Insider
The dismissal, first brought to light by The Moscow Times and corroborated by The Bell, marks a sharp turn inside Russia’s elite financial corridors. According to sources close to the economist, VEB Chairman Igor Shuvalov ordered Klepach’s firing “by a call from above” following 12 years of service at the state bank. The catalyst was a series of candid warnings delivered by Klepach during a session at the Nikitsky Club, where he dissected the structural fragility of the Russian economy under mounting international sanctions.
Before joining VEB.RF, Klepach spent 10 years at the Ministry of Economic Development, serving as a deputy minister from 2008 to 2014 under Elvira Nabiullina, Andrei Belousov, and Alexei Ulyukayev. His ouster underscores a growing policy within Moscow regarding macroeconomic realism, even when articulated by veterans of the state apparatus.
Weighing Costs Against the Myth of Collapse
During the session, Klepach dismantled official optimism regarding Russia’s economic resilience. He pointed to escalating domestic costs driven by sanctions, Western trade blockades, and Ukrainian strikes targeting critical infrastructure, ports, and chemical and oil plants.
“We are lagging behind. We are losing technological and economic competition globally, and I must say we are losing it not just to China and the United States, but in some ways to Ukraine,” Klepach stated, according to reporting by The Moscow Times. He cautioned against misplaced faith in the collapse of Ukraine’s economy, noting, “There is an illusion that everything will collapse over there. It hasn’t collapsed and it won’t. Our costs are mounting.”
Furthermore, Klepach warned of an impending social crisis that could materialize abruptly, drawing explicit historical parallels to the economic pressures preceding the February Revolution of 1917 and the dissolution of the Soviet Union in 1991.
An Expert Consensus on Stagnation
Commenting on the dismissal, Alexandra Prokopenko, a senior fellow at the Carnegie Berlin Center, noted that ignoring the mounting structural strains is a luxury reserved for state propagandists rather than credible analysts. As Prokopenko observed, “Dismissing Klepach—one of Russia’s top macroeconomists—is unlikely to postpone the looming crisis he speaks of. Only paid propagandists, not respected economists, can fail to see the problems in barely-there economic growth, two-speed industrial output, and falling investments amid rising, unproductive defense spending.”
What Lies Ahead for State Finance
As VEB.RF continues to finance national projects, the removal of Klepach signals that institutional forecasting has been subordinated to wartime messaging. By silencing its macroeconomic voices, Moscow has chosen administrative comfort over the unvarnished truth of a protracted economic battle.
What does this signal for the future of Russian fiscal policy as the war drags on? Share your thoughts below.
