People walk in front of a billboard honouring a participant in Russia’s military action in Ukraine and reading “Pride of Russia!” and a Neftmagistral gas station pylon which shows that there is no gasoline at the station in Moscow on July 10, 2026.
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Russian government officials told CNBC that the economy is strong and healthy despite “unprecedented foreign pressure” following the country’s full-scale invasion of Ukraine in early 2022.
That message sits in stark contrast with the views of the former chief economist of Russia’s state-controlled development bank VEB, who was dismissed on Sunday after comments he made earlier in the year were reported in Russian-language media.
Andrei Klepach, a former deputy economy minister, was reportedly fired after presenting a report warning that Russia could not win a prolonged war of attrition with Ukraine and predicting a major social crisis.
Klepach’s dismissal was directly linked to his scathing economic assessment, according to exiled independent Russian outlet The Bell, which cited unnamed sources familiar with the matter when it first reported the news. CNBC could not independently verify the report.
“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 speech presented to fellow economists on May 21, according to a translation.
Andrey Klepach, Chief Economist, VEB.RF speaks during the The Future of the World Order: Between Clashes and Cooperation session of the XXVIII St. Petersburg International Economic Forum at the Expoforum Convention and Exhibition Center in St. Petersburg.
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“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.
The move to dismiss Klepach appears to underscore the Kremlin’s zero-tolerance approach to public criticism and opposition to its military campaign in Ukraine after nearly four-and-a-half years of war.
Russia defiant over its fiscal position
Russian government officials remain defiant over the country’s economic situation.
The Russian embassy to the U.K. told CNBC that Russia’s fiscal position remains “significantly stronger” than that of many Western economies, pointing to foreign public debt of around $57 billion — noting that this is “considerably less” than the amounts 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.
“Attempts to undermine Russia through economic pressure have not produced the results their authors expected,” they added.
“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.
‘Best economic minds in Russia are the most alarmed’
Anders Aslund, a Swedish economist and former senior fellow at the Atlantic Council, said the news of Klepach’s dismissal was no surprise.
“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.
Separately, Nigel Gould-Davies, a senior fellow for Russia and Eurasia at the International Institute for Strategic Studies, described Klepach as very capable and smart.
In this pool photograph distributed by the Russian state agency Sputnik, Russia’s President Vladimir Putin (C) attends a meeting with heads of international news agencies, on the sidelines of the Saint Petersburg International Economic Forum (SPIEF) at the Rimsky-Korsakov Saint Petersburg State Conservatory, in Saint Petersburg, on June 18, 2025.
Vyacheslav Prokofiev | Afp | Getty Images
“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 been brought into sharper focus in recent weeks by Ukraine’s long-range drone attacks on oil refineries and delivery warehouses.
Though it has defied expectations and is even growing slowly, according to recent data, analysts say this masks problems, such as the Kremlin’s reliance on military spending, higher taxes and subsidized bank lending.
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