Russia fires top economist after critical economic assessment

Andrei Klepach, the chief economist at Russia's state development bank VEB, has been dismissed following his critical assessment of the nation's economic health. His public statements, which warned of weak economic and technological development and Russia falling behind countries like China, the US, and Ukraine, led to his termination. Reports from independent Russian media suggest the Kremlin ordered his firing, directly linking it to a speech he gave in May. Klepach, a well-known economist, had previously voiced dissenting economic views not aligned with the Putin administration. Heli Simola, a senior economist at Finland's central bank, noted Klepach's deep understanding of the Russian economy, gained from his prior role in the country's Ministry of Economy. Simola stated that such dissenting voices are unwelcome by the current administration. She added that Russia's economic situation has weakened this year, with forecasts predicting only 0.5-1% GDP growth. While a collapse isn't imminent, the long-term outlook is bleak, with growth estimates capped at 1% annually, down from pre-war projections of 1.5%. Simola attributes this to structural issues predating the war, now exacerbated by significant imbalances. The government, she observed, blames external factors for economic problems, effectively disseminating this narrative through tightly controlled media. The war's demands force difficult choices on taxation and spending, yet Simola believes ordinary Russians' economic tolerance limits are not yet reached, partly due to rising wages and compensation for military service. Fear of violence, she concluded, also keeps critical voices from public discourse.

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We are not winning this consumption war against Ukraine.