Russian state-owned Vnesheconombank (VEB) has fired its chief economist, Andrei Klepach, following media reports of a negative economic assessment he offered that contradicted Russian President Vladimir Putin's theory of victory in Ukraine. Klepach gave an assessment of Russia's economic and geopolitical challenges to the Nikitsky Club of the Moscow Exchange on May 21, concluding that Russia's military economy is stagnant as high defense spending, restrictive monetary policy, sanctions and the Ukrainian strikes curb growth and investment.
This is according to the "Institute for the Study of War" (ISW).
The independent Russian media outlet Moscow Times reported Klepach's assessment on August 14, and other Russian media outlets reported his statements on August 15.
The independent Russian media outlet Bell reported on August 16, citing a source close to Klepach, that VEB CEO Igor Shuvalov fired Klepach the same day after a "call from above", while another source confirmed that Klepach's dismissal was related to his economic assessment.
Klepach says Ukrainian strikes on Russian port, oil, chemical and logistics infrastructure are a noticeable macroeconomic barrier to Russian economic expansion, which he says is likely to slow to near-zero annual growth in 2026.
Klepach said that Russian defense spending has increased significantly, which is has led to the increasing displacement of the Russian military-industrial complex from the civilian economy, increasing restrictions on civilian industrial sectors and their contraction.
Putin clearly formulated a theory of victory in Ukraine, relying on a prolonged attrition war, at the St. Petersburg International Economic Forum (SPIEF) on June 7, 2024.
Putin's theory of the case assumes that Russian forces will be able to continue the offensive indefinitely; prevent Ukraine from conducting successful operationally significant counteroffensive operations; and that Russia can prevail in a war of attrition by outlasting Ukrainian will and that of Ukraine’s external backers.
ISW has already observed that Russia is increasingly struggling to maintain its method of waging a prolonged war of attrition as casualties outstrip recruitment rates and financial and material costs mount, and that the Kremlin is exaggerating its tactical achievements to present an appearance of continued military gains.
The Russian military has systematically misinformed Putin about the state of the front lines, in part due to a widespread culture of lying within the Russian armed forces that bloggers call “beautiful reporting.”
Putin is probably more aware of Russia’s economic problems than the military situation, but he is similarly determined to project an image of economic stability despite evidence of Russia’s ongoing economic woes. Russia.
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Sandu is the first European head of state or senior official to explicitly state that Russian forces were deliberately launching some of their drones into European airspace. ISW continues to assess that such drone incursions are part of Russia's "Phase Zero" campaign, which aims to create information and psychological conditions for potential future provocations against NATO, including through Russian false flag provocations, sabotage, electronic warfare interference, and overflights.
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