Andrei Klepach, who was one of Russian President Vladimir Putin’s top macroeconomists, was fired after saying Russia was “falling behind” in the war with Ukraine.
Two sources familiar with the matter told Reuters that the economist was fired over remarks he made in May that resurfaced in Russian media last week.
Speaking at a gathering at the Nikitsky Club of economists, academics, and government officials, Klepach said, “We are falling behind.” He added, “We are losing both the technological and economic competition in the world. And we are losing it not only to China and the United States. In some ways, we are losing it to Ukraine too.”
Klepach attributed Ukraine’s resilience in part to financial support from the West.
“We will not win the competition in this war of attrition,” he said. “We have the illusion that everything there will collapse. It has not collapsed and will not collapse. Our costs are mounting.”
Klepach worked for Russia’s National Economic Development Institution, VEB, for 12 years. Before that, he worked at Russia’s Ministry of Economic Development for ten years. Klepach confirmed his dismissal to Reuters.
Klepach’s economic diagnosis contrasts sharply with Putin’s assessment of the Russian economy. In June, Putin said efforts to cool the Russian economy were deliberate. Putin was directly asked whether Russia’s economy was struggling because of the war and said such claims were exaggerated.
“We’ve deliberately taken steps to cool the economy,” Putin said of Russia’s Central Bank putting the country’s key interest rate at 14.5%, which he called “a difficult decision.”
“You can say we’ve cooled off, or you can say we haven’t done everything yet, but these are deliberate steps. We don’t want inflation — hyperinflation — to reach 60-80%, as it is in some countries,” he said. “We’re fighting for the health of the Russian economy as a whole.”
The United States is ramping up restrictions with the Senate passing the Lindsey O. Graham Sanctioning Russia and Iran Act on August 7. The Senate passed it 86 votes to 11, but it still has to pass the House. If the bill passes the House, President Donald J. Trump has indicated he would sign the legislation, which allows targeted tariffs of up to 100% on the five largest importers of Russian crude oil or gas.
Charles Lichfield, director of economic foresight and analysis at the Atlantic Council’s GeoEconomics Center, said cracks are showing in the Russian economy through inflation and the Russian government’s large deficit. “They are on course to double the deficit they had in 2025 and that was already double what they had in 2024,” Lichfield said. “On inflation, they managed to bring it down to basically the target of 4% late last year, which was a big achievement given all the internal and external inflationary pressures, but it looks like that will not last.”
Russia’s economy has also faced pressure from declining energy revenues, Western sanctions, and Ukrainian strikes on Russian energy infrastructure and vessels associated with Moscow’s shadow fleet.
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