Russian state bank chief economist dismissed after warning of war costs
The chief economist at Russia’s state development bank has been ousted after a May speech highlighted Russia’s declining competitiveness against global rivals and predicted an impending social crisis.
Andrey Klepach has been removed from his position as chief economist at Russia’s state development bank VEB, following the public release of a speech in which he warned that the war in Ukraine was inflicting severe damage on the Russian economy. The dismissal was confirmed by the bank to the Russian state news agency TASS, which stated that a successor had already been selected.
In the address, delivered at a financial forum in May, Klepach argued that Russia was losing both technological and economic competition to China, the United States, and Ukraine. He attributed this decline in part to Western financial support for Kyiv, noting that Russia’s gross domestic product growth was slower than that of its competitors. The speech, which was published on the website of the Nikitsky Club, marked a rare public critique from a senior figure within a state institution regarding the costs of the conflict.
Klepach predicted that the mounting costs of the war would precipitate a social crisis, warning that the economy’s resilience to Western sanctions was being severely tested. He highlighted rising income inequality and criticised the quality of governance in Russia, describing it as constantly deteriorating. He stated that decisions were being made with low justification but significant long-term strategic consequences, adding that while the economy would not collapse, the lag behind rivals would continue to grow.
The Russian central bank had previously suggested in June that the economy might not grow at all in the current year, a sentiment that contrasts with President Vladimir Putin’s public reassurances that the economy remains stable despite external attempts to undermine it. Klepach, who was appointed to his role at VEB in 2014 after a decade at the Ministry of Economic Development, also confirmed his dismissal to Reuters.
The specific reasons for the delay between the delivery of the speech in May and its public release last week were not detailed in the source. The identity of Klepach’s successor has not been disclosed, though the bank confirmed the candidate has been selected. The timeline for the implementation of the predicted social crisis remains uncertain.
