Russia may not win prolonged war of attrition, economist warns

Andrei Klepach, chief economist of Russian state-owned bank Vnesheconombank (VEB), has warned that Moscow may not be able to defeat Ukraine in a prolonged war of attrition. Speaking at a session of the Nikitsky Club, he said Western sanctions, soaring military spending, and Ukrainian strikes on ports, oil refineries, and chemical plants are mounting economic costs. The Moscow Times reported his remarks.

Klepach said Russia is losing the technological and economic competition globally, falling behind not only China and the US but also Ukraine, whose economy is surviving with massive financial assistance. He warned that Russia's economy entered a recession this year, with civilian industries such as aviation, construction, and food production in decline. The central bank's strict policies are responsible for roughly half the downturn, he added.

He cautioned that the conflict, now longer than the Great Patriotic War, shows no end in sight and that losses from Ukrainian strikes are becoming a significant macroeconomic barrier. US President Donald Trump's tightened sanctions have pressured India and China to reduce purchases of Russian oil, limiting growth to 1-1.5%. Klepach predicted these pressures could lead to a social crisis in Russia.