A prominent Russian economist has been fired after delivering an unusually sharp assessment of the country’s economic condition, warning that the mounting costs of the war in Ukraine could ultimately trigger a “social crisis” at a time “when no one particularly expects it.

Andrei Klepach, chief economist at Russia’s state development bank VEB, was dismissed after remarks from a speech he delivered to fellow economists in May were reported by Russian media. Klepach had served as VEB’s chief economist since 2014.

In the speech, Klepach warned that Russia was losing ground economically and technologically to China and the United States and, “in some ways,” even to Ukraine. He also rejected expectations that Ukraine’s economy was approaching collapse.

“We will not win the competition in this war of attrition,” Klepach said. “We have the illusion that everything there will collapse. It has not collapsed and will not collapse. Our costs are mounting.”

Klepach warned that the economic pressures facing Russia could ultimately produce a “social crisis” that would emerge “precisely when nobody is particularly expecting it.”

His comments represented a rare public criticism from a senior figure at a Russian state institution and challenged President Vladimir Putin’s insistence that the Russian economy remains stable despite the pressures created by the war.

VEB confirmed that Klepach was no longer its chief economist but did not publicly provide a reason for his dismissal. Klepach also confirmed his firing to Reuters. The independent Russian outlet The Bell reported, citing sources, that he was fired on orders from the Kremlin and that the decision was directly linked to his May speech.

The dismissal comes amid mounting pressure on Russia’s economy from massive wartime spending, Western sanctions and Ukrainian attacks on energy and logistics infrastructure.

During the first four months of 2026, Russia’s budget deficit reached 5.87 trillion rubles, approximately $81 billion — already well above the government’s 3.79 trillion-ruble deficit target for the entire year. Several of Putin’s closest advisers have also privately warned him that the current level of wartime spending is becoming unsustainable, The Guardian reported.

Recent Ukrainian strikes have hit dozens of warehouses belonging to Wildberries, Russia’s largest e-commerce retailer, destroying inventory worth billions of dollars. The attacks have raised questions about the company’s financial stability and dealt a severe blow to thousands of independent sellers who rely on the platform for their livelihoods.

Despite the mounting economic pressure, Putin has given no indication that he intends to scale back the war or rein in spending. The Kremlin has instead sought additional revenue by raising taxes on smaller businesses and pressuring oligarchs to contribute more toward the war effort.

At the same time, the surge in oil prices this year following the U.S. war with Iran has provided Moscow with billions of dollars in additional revenue, helping cushion some of the growing economic pressure.

(YWN World Headquarters – NYC)