People walk in front of a sign that reads “Pride of Russia!” in honor of participants in Russia’s military operations in Ukraine. July 10, 2026. Neftmagistral gas station pylon showing no gasoline at the gas station in Moscow.
Igor Ivanko | AFP | Getty Images
Russian government officials told CNBC that the economy is strong and healthy despite “unprecedented foreign pressure” following the full-scale invasion of Ukraine in early 2022.
This message is in stark contrast to the views of the former chief economist of Russia’s state-run development bank VEB. He was fired on Sunday after comments he made earlier this year were reported in Russian-language media.
Former Deputy Economy Minister Andrei Klepakha was reportedly fired for presenting a report warning that Russia could not win a prolonged war of attrition with Ukraine and predicting a major social crisis.
Exiled Russian independent news outlet The Bell first reported the news, citing unnamed sources familiar with the matter, that Klepakha’s dismissal was directly related to his scathing economic assessment. CNBC could not independently verify this report.
“We cannot compete in this war of attrition. We are under the illusion that everything will collapse. It hasn’t collapsed, and it won’t. Our costs are rising,” Klepacz said in a May 21 speech to fellow economists, according to a translation.
VEB.RF Chief Economist Andrei Klepakha speaks at the session “The Future of the World Order: Between Conflict and Cooperation” at the 28th St. Petersburg International Economic Forum, held at the Expoforum Convention and Exhibition Center in St. Petersburg.
Sopa Images | Light Rocket | Getty Images
“I believe that Russia will not collapse, but it is almost certain that it will eventually end up in a social crisis. It will not collapse economically, but all the subsequent fallout will widen the delay,” he added.
The move to remove Klepakha appears to underline the Kremlin’s zero-tolerance attitude toward public criticism and opposition to military operations in Ukraine after nearly four and a half years of war.
Russia defiant over fiscal situation
Russian government officials remain defiant about the country’s economic situation.
The Russian Embassy in the UK told CNBC that Russia’s fiscal position remains “significantly stronger” than many Western countries, noting that its external public debt is around $57 billion, “considerably less” than the US, UK, Italy and France alone spend on debt servicing.
“The Russian economy remains resilient, as does the will of the people,” a spokesperson for the Russian embassy in the UK told CNBC in an email.
“Attempts to weaken Russia through economic pressure have not yielded the results the authors expected,” they added.
“On the contrary, Western countries themselves, including the UK, are paying a heavy price for their reckless sanctions policies. British businesses have lost access to the Russian market and further costs have been imposed on the UK economy through supply chain disruptions and rising costs of energy and goods.
“Russia’s best economist is the most alarmed.”
Anders Aaslund, a Swedish economist and former senior fellow at the Atlantic Council, said news of Klepach’s dismissal was not surprising.
“A prestigious analysis concludes that Russia cannot win a war of attrition against Ukraine and that Russia is likely to fall into a social crisis similar to that of 1917,” Aslund said via X on Sunday.
Separately, Nigel Gould-Davies, a senior researcher on Russia and Eurasia at the International Institute for Strategic Studies, described Klepakha as an extremely capable and intelligent person.
In this pool photo distributed by Russian state news agency Sputnik, Russian President Vladimir Putin (C) attends a meeting with heads of international news agencies on the sidelines of the St. Petersburg International Economic Forum (SPIEF) held at the Rimsky-Korsakov St. Petersburg State Conservatory in St. Petersburg on June 18, 2025.
Vyacheslav Prokofiev | AFP | Getty Images
“I have long said that Russia’s greatest economic intellectuals are the most alarmed, and this confirms that once again,” Gould-Davis said via social media on Monday.
Russia’s wartime economy has come into further focus in recent weeks with long-range drone attacks by Ukraine on refineries and distribution warehouses.
Recent data shows growth is even slower than expected, but analysts say this masks problems such as the Kremlin’s reliance on military spending, higher taxes and subsidized bank loans.
