Russian state bank economist warns of losing war of attrition and social crisis

Andrei Klepach, chief economist of Russia’s state-owned Vnesheconombank (VEB), said the country cannot win a prolonged economic war of attrition against Ukraine. Klepach, speaking at a session of the Nikitsky Club, said Russia is losing ground technologically and economically to the West, including Ukraine, despite Western sanctions and a blockade. He warned that rising costs from Ukrainian attacks on infrastructure and the Central Bank of Russia’s strict policies could lead to a social crisis.

Russia’s economy grew 1.3% year-on-year in the second quarter of 2026, according to official data. Analysts said the growth masks deeper problems, including a widening budget deficit and inflation. The deficit is expected to double from 2025 levels, driven by lower oil and gas revenues and sustained Ukrainian drone strikes on refineries. Households are feeling the strain, with reports of consumers switching to cheaper food products.

Klepach was dismissed from Vnesheconombank after his remarks. Outlets reported his comments included a comparison to the months before the February Revolution in 1917, when even Vladimir Lenin considered an overthrow impossible. It is unclear whether his dismissal was directly linked to his statements.

The six left-rated digests and two full reports led on Klepach’s warning that Russia cannot win the war of attrition and is heading toward a social crisis. CNBC’s full report highlighted the two-tier economy, where military-industrial workers fare better than civilians, and noted that worsening conditions could incentivise President Vladimir Putin to escalate the conflict. The Daily Beast’s digest quoted Klepach’s warning of a "social crisis" and his comparison to pre-revolutionary Russia.

The left-rated reports carried Klepach’s assessment that Russia is losing the technological and economic competition globally, including to Ukraine. They also reported his dismissal from Vnesheconombank. Novinky.cz’s digest quoted Klepach saying, "We are lagging behind," and that the war would lead to a social crisis. News.de’s digest described his warning as a "revolution" alert to Putin.

The two centre-rated digests and Live Mint’s full report led on Russia’s economic growth and the strains beneath it. Live Mint’s full report quoted Klepach saying, "We won’t win the competition in this war of attrition," and detailed his warnings about rising costs, falling investment, and the impact of central bank policies. The report also noted that US President Donald Trump’s sanctions at the end of 2025 pressured countries like India and China to reduce Russian oil purchases.

The centre-rated digests carried the official GDP growth figure of 1.3% and the widening budget deficit. The Press’s digest said analysts warn the deficit could intensify pressure next year. Neither of the centre-rated digests mentioned Klepach’s dismissal or his comparison to pre-revolutionary Russia.

The right-rated digest from the Daily Express led on the impact of economic strain on Russian consumers. It reported that locals are switching from chocolate to cheaper cookies, despite official figures showing economic growth. The digest did not mention Klepach’s warning about losing the war of attrition, his dismissal, or the potential for a social crisis.

None of the right-rated digests mention Andrei Klepach’s warning that Russia cannot win the war of attrition or his prediction of a social crisis. The centre-rated digests do not report his dismissal from Vnesheconombank or his comparison to pre-revolutionary Russia. None of the digests from any side specify the expected size of Russia’s budget deficit for 2026.