Andrei Klepach, the chief economist of the Russian state bank VEB RF (Vnesheconombank), was dismissed on Sunday following media reports of his candid remarks. Klepach had stated that Russia is unlikely to win a prolonged conflict against Ukraine and warned of an impending severe social crisis in the country.
According to an investigation by the Russian outlet The Bell, cited by UNN, the president of the state corporation VEB, Igor Shuvalov, made the decision after receiving a "call from above." Klepach, who had held the position for 12 years and previously worked a decade at Russia's Ministry of Economic Development, saw his remarks lead to his ousting. VEB did not respond to media requests for comments.
The controversial comments were made during a session of the Nikitsky Club—a Russian forum of academics and business leaders—in May 2026, but excerpts only surfaced publicly on Saturday, suggesting a deliberate leak or delayed access to the recordings.
In his speech, as reported by Ukrainska Pravda, Klepach openly acknowledged the structural weaknesses of the Russian economy: "We are lagging behind. We are losing the technological and economic competition on a global scale. And, as I have already mentioned, we are losing not only to China and the United States; in some aspects, we are also losing to Ukraine."
He noted that despite the partial destruction of its economy and a demographic catastrophe, Ukraine endures due to substantial Western financial support. "With that level of backing, their military spending and other expenditures are nearly 50% of our budget," he cautioned.
Economic Challenges and Military Expenditure
Regarding the conflict's prospects, Klepach was unequivocal: "We will not win this competition in a war of attrition. We have the illusion that everything there will collapse. It has not collapsed and will not collapse."
Klepach depicted a Russian economy that, after rapid growth in 2023-2024 driven by military expenses, entered a downturn by 2026. Investment plummeted, and entire civilian sectors—from aircraft manufacturing and construction materials to light industry and food production—are experiencing a recession.
Intensified U.S. sanctions at the end of 2025 also led India and China to reduce purchases of Russian oil, "despite their repeated declarations that they do not comply with the sanctions," he noted.
Impending Social Crisis
Klepach painted a bleak picture for Russia: an unavoidable social crisis, akin to the February Revolution of 1917 or the collapse of the Soviet Union in 1991, which will occur "when no one expects it."
Ukrainian attacks on Russian refineries have already become a "significant macroeconomic barrier to growth," according to Klepach.
The firing was perceived as a Kremlin retaliation for statements that contradict the official narrative of economic strength and military progress. This incident adds to a series of economic censorship episodes in Russia since the large-scale invasion of Ukraine began in February 2022.
"I believe Russia will not disintegrate, but I am almost certain we will face a social crisis," Klepach concluded in that May session, words that ultimately cost him his position.
FAQs on Russia's Economic and Social Outlook
What led to Andrei Klepach's dismissal?
Andrei Klepach was dismissed following media reports of his remarks that Russia cannot win a prolonged war against Ukraine and is heading towards a severe social crisis. His comments were seen as contradicting the official narrative.
What are the economic challenges faced by Russia?
Russia faces several economic challenges, including lagging behind in global technological and economic competition, a decline in investment, and a recession in civilian sectors. Additionally, intensified sanctions have affected oil sales to India and China.