Christine Drews Sieger
The sudden dismissal of top economist Andrei Klepach signals growing Kremlin anxiety over the mounting financial strain of a prolonged war.
Moscow experienced a major shakeup in its top financial ranks this week.
Andrei Klepach, chief economist at state development bank VEB and former deputy economy minister, was fired on Sunday.
The swift decision came shortly after he delivered a rare, candid assessment of the state’s wartime economy.
His abrupt departure underscores growing anxiety among top officials over how long the nation can fund its military ambitions.
Russian exile media outlet The Bell, reported that his removal was directly linked to these critical financial warnings, according to Ziare.com.
Warnings of attrition
Klepach delivered his sharpest critique during a conference with fellow economists back in May.
He openly questioned whether current fiscal policy could survive a drawn-out struggle.
“In this war of attrition, we will not win the competition. We live with the illusion that everything will collapse. It has not happened and it will not happen. Our costs are increasing,” he said.
He argued that while a complete financial collapse was unlikely, a serious social crisis remains a genuine threat.
Heavy defense spending and tax hikes continue to hide deeper weaknesses, while recent Ukrainian drone strikes against crucial oil refineries have piled on fresh pressure, Ziare.com reports.
Rejection from Moscow
Kremlin representatives firmly push back against any suggestions of financial trouble.
A spokesperson at the Russian Embassy in the UK told CNBC that the country’s economic standing stays “significantly stronger” than that of many Western powers.
Diplomats insisted the state is holding up remarkably well against “unprecedented external pressure.”
They added that Western sanctions have mostly backfired, hitting foreign markets with rising energy prices and broken supply chains instead.
Economist Anders Aslund highlighted the threat of domestic unrest, while other Russia experts emphasized a grim paradox: Moscow’s sharpest economic minds are precisely the ones most alarmed by the current trajectory, according to Ziare.com.
The cost of the war
The scale of Russia’s financial strain is becoming increasingly difficult to ignore.
The Financial Times reported that Moscow’s budget deficit had ballooned to around 6.5 trillion rubles, nearly twice the amount originally planned, as the cost of the war continues to weigh heavily on state finances.
Russia is not necessarily facing an imminent economic collapse. But the widening deficit reinforces Klepach’s central warning: the longer the war continues, the more resources Moscow must devote to its military, leaving less room for the wider economy.
The Kremlin may still be able to keep the war machine running, but the financial cost of doing so is becoming harder to conceal.
