Top Russian state bank economist says Moscow cannot outlast Ukraine

Andrei Klepach, chief economist at VEB, a prominent Russian state-controlled bank, stated that Russia cannot prevail in a prolonged economic and military struggle against Western-backed Ukraine and is heading towards a significant social crisis, according to The Moscow Times. Russia's economy is experiencing increasing damage due to Western sanctions and Ukrainian attacks on ports, infrastructure, chemical plants, and oil refineries.

Klepach acknowledged that Russia is losing technological and economic competition to not only the United States and China but possibly even Ukraine in certain areas. He emphasized that Russia is falling behind in both the technological and economic race in the world. Despite the partial destruction of Ukraine's economy and a demographic catastrophe there, the Ukrainian economy remains resilient due to substantial financial assistance.

This financial support equates to nearly 50% of Russia's budget. Klepach firmly declared that Russia will not triumph in a long-lasting economic and military confrontation. He clarified that while the notion of complete collapse in Ukraine may not have materialized yet, it will not occur either. After a period of rapid economic growth in 2023 and 2024, driven primarily by increased government military spending and investment in the defense-industrial sector, Russia's economy entered a decline in 2026.

Klepach observed a sharp decrease in investment activity and several civilian industries, including aviation, construction materials, light industry, and food production, entering recession. Moreover, he highlighted the adverse effects of tighter U.S. sanctions introduced in late 2025, which have caused India and China to decrease their purchases of Russian oil, despite claiming non-compliance with the imposed restrictions.

The economist ultimately foretold an imminent social crisis in Russia, likening the risks to the February Revolution of 1917 and the collapse of the Soviet Union. He warned that such a crisis could arise unexpectedly, and Russia's technological lag behind other nations is likely to continue widening. Klepach asserted that while he does not foresee Russia falling apart, he is almost certain that the country will experience a social crisis.