An Economist At The Kremlin's Main Bank Predicts Russia's Defeat And A Revolution
- 14.08.2026, 20:06
The economic costs are only increasing.
Russia will not be able to win the competition in a “war of attrition” while Ukraine is supported by the Western world. This was stated at a session of the Nikitsky Club by Andrey Klepach, chief economist at Vnesheconombank (VEB.RF), a key Russian state-owned bank that finances the Kremlin’s national projects and holds the status of a “state development corporation,” reports The Moscow Times.
According to Klepach, the costs to the Russian economy from sanctions and the Western blockade are rising, the damage from Ukrainian strikes on ports, infrastructure, chemical plants, and oil refineries is increasing, and Russia is falling further and further behind the rest of the world in technological development.
“We’re falling behind. We’re losing both the technological and economic competition on the global stage. Moreover, as I’ve already said, we’re not only losing to China and the U.S.—in some respects, we’re losing to Ukraine as well. Ukraine’s economy is, of course, partially devastated, and it’s facing a demographic catastrophe. But, once again, the Ukrainian economy is surviving despite everything. Of course, there’s enormous financial aid <�…> “With that kind of aid going toward military spending and their own expenses—that’s roughly almost 50% of our budget,” Klepach said.
“We won’t win this war of attrition. We have this illusion that everything over there will collapse. It hasn’t collapsed and it won’t. Our costs are mounting,” Klepach continued.
He noted that following the military boom of 2023–24, the Russian economy has entered a downturn this year, with investments plummeting, and civilian industrial sectors have slipped into recession—from the aviation industry and construction materials production to light industry and the food industry. The situation is exacerbated by the ultra-tight monetary policy of the Central Bank of the Russian Federation, which, according to Klepach, is responsible for at least half of the economic downturn.
“The conflict in Ukraine involving NATO has already lasted longer than the Great Patriotic War, and there is still no end in sight. Both sides are escalating their attacks, including against each other’s economies. The losses from Ukrainian Armed Forces strikes on our infrastructure—ports, oil and gas facilities, chemical complexes, and logistics—are mounting and are already becoming a significant macroeconomic barrier to the growth of the Russian economy,” Klepach said.
The tightening of U.S. sanctions at the end of 2025 led India and China to begin reducing their purchases of Russian oil, “despite their repeated statements that they are not subject to the sanctions,” he noted. Given the likely new wave of sanctions and “mounting losses from Ukrainian Armed Forces strikes,” the Russian economy’s potential growth rate may not exceed 1–1.5%.
According to Klepach, all of this will inevitably lead Russia to a “social crisis”—and “at a time when no one is particularly expecting it.”
“But let me remind you, no one expected the February Revolution either. Lenin wrote in December 1916 that ‘we won’t live to see it,’ but he did just a few months later. The situation in the Soviet Union in 1991—we had been heading toward it for a long time and consistently, and everyone understood that we were heading toward a crisis, but there was no fatal inevitability that the Union would collapse,” Klepach said.
“I believe that Russia will not fall apart, but I am almost certain that we will face a social crisis. Economically, we will not collapse, but our lag behind the rest of the world will continue to grow, with all the ensuing consequences,” he concluded.