Russia will not be able to win a war of attrition against Ukraine as long as Kyiv receives Western support, according to the chief economist at a major Russian state bank. Andrei Klepach, chief economist at VEB, told a discussion club meeting that mounting costs and foreign sanctions are draining the Russian economy.
Klepach said Russia is falling behind in global technological and economic competition after a military boom in 2023 and 2024 gave way to a broader economic downturn. He noted that civilian sectors ranging from aviation to food production have already fallen into recession.
The economist highlighted the heavy toll of Western sanctions alongside Ukrainian strikes on Russian transport links, oil and gas facilities, and military infrastructure. He stated that while the Russian economy stuck in the conflict faces rising expenses, Ukraine continues to survive despite severe damage and demographic hardship, largely due to massive financial aid from the West.
Rising costs and technological lag
Klepach said Russia is losing both technological and economic competition on the world stage, lagging behind not only the United States and China, but in some areas behind Ukraine as well. He warned against illusions that Ukraine would collapse, emphasizing that Moscow cannot win the competitive struggle in a long war of attrition.
VEB, formally known as VEB.RF or the State Development Corporation, is a key Kremlin-owned financial institution that finances major national development projects and infrastructure initiatives across Russia. Moscow has relied heavily on state spending to support industrial production since launching its invasion of Ukraine, but Western sanctions have increasingly restricted access to key technology and global financial markets.
Warnings of a future social crisis
Klepach predicted that economic strain would eventually spark an unexpected social crisis in Russia. Drawing a parallel to historical events, he recalled that Vladimir Lenin wrote in December 1916 that his generation might not live to see a revolution, yet the Russian Empire collapsed in the February Revolution just months later. Klepach concluded that while Russia will not face an immediate total collapse, its economic lag will continue to widen.
Predictions of an internal shock
Separately, prominent Ukrainian entrepreneur and banker Andriy Onistrat suggested that the war could end abruptly due to an unpredictable event in Russia. Speaking in comments reported by Ukrainian news agency UNIAN, Onistrat predicted a catastrophic internal coup against the Kremlin administration.
Onistrat likened the potential turning point to a black swan event, comparing it to the armed mutiny launched by Wagner mercenary chief Yevgeny Prigozhin in 2023 but with far more severe consequences. He explained that such a shock could originate from within the Federal Security Service, also known as the FSB, or other internal factions, making its precise timing and form impossible to forecast.
