Economist of Russia’s state-owned bank admits Russia’s defeat in a war of attrition with the West
Kyiv • UNN
VEB Chief Economist Andrey Klepach said that Russia is losing the technological and economic competition, including to Ukraine. He predicts a social crisis in the Russian Federation due to rising costs and a declining economy.
At the Kremlin’s main state-owned bank, Russia’s defeat in the economic "war of attrition" with the West was forecast. This was reported by The Moscow Times, according to UNN.
Details
According to Andrei Klepach, chief economist at VEB, a key Russian state-owned bank that finances the Kremlin’s national projects and has the status of a "state development corporation," Russia will not be able to win the competition in the "war of attrition" while the Western world supports Ukraine.
He noted that the costs to the Russian economy from sanctions and the Western blockade are rising, losses from Ukrainian strikes on ports, infrastructure, chemical plants and oil refineries are increasing, and Russia is falling further and further behind the world in technological development.
We are falling behind. We are losing both the technological and economic competition in the world. Moreover, as I have already said, we are losing it not only to China and the United States—we are losing it in some respects to Ukraine. Ukraine’s economy is, of course, destroyed to a certain extent, and there is a demographic catastrophe. But, once again, despite everything, the Ukrainian economy is surviving. Of course, there is enormous financial assistance there. With such assistance, military spending and their own expenditures account for approximately almost 50% of our budget
"We will not win the competition in this war of attrition. We have the illusion that everything there will collapse. It has not collapsed and will not collapse. Our costs are mounting," Klepach continued.
He recalled that after the military boom of 2023–2024, the Russian economy shifted into decline this year, investment fell sharply, and civilian industries slid into recession—from aircraft manufacturing and the production of construction materials to light industry and food processing. The situation is being worsened by the extremely tight policy of the Central Bank of the Russian Federation, which, in Klepach’s opinion, bears responsibility for at least half of the economic downturn.
According to the economist, all this will inevitably lead Russia to a "social crisis," moreover, "when no one is particularly expecting it."
"But no one expected it, I remind you, nor did anyone expect the February Revolution. Lenin wrote in December 1916 that \"we will not live to see it,\" but he lived to see it just a few months later. Economically, we will not collapse, but our lag will continue to grow, with all the consequences," Klepach concluded.
We remind you
Russia’s federal budget deficit for the first 7 months of 2026 increased to 6.46 trillion rubles, while in July alone it grew by another 724 billion rubles. This was reported by Ukraine’s Foreign Intelligence Service.