Russia removes top economist after Ukraine war cost warnings

Andrey Klepach, who held the position of chief economist at Vnesheconombank (VEB), Russia's state development bank, has been ousted from his role after raising concerns about the economic toll of the ongoing conflict in Ukraine. The removal comes amid growing scrutiny of how the war is affecting Russia's fiscal position and competitiveness in global markets.

Klepach had publicly warned that Russia was falling behind rival economies as military expenditures mounted. His assessments suggested the financial strain of sustaining operations in Ukraine posed significant challenges to Russia's broader economic development and modernization efforts. Such candid assessments from senior economic officials have become increasingly rare in Russian policy circles.

The departure signals potential friction between those advocating for fiscal restraint and policymakers prioritizing military objectives. VEB, as a key institution in Russia's development financing apparatus, plays a central role in the Kremlin's economic strategy, making senior personnel decisions at the bank a matter of political significance.

The removal underscores the challenges facing Russia's economy as military commitments continue to strain resources. International sanctions and defense spending have created pressure on government budgets, raising questions about the sustainability of current policies among Russian technocrats and economists.