VEB’s chief economist says Russia will not win the competition with the West "in this war of attrition"

VEB’s chief economist said that Russia will not win the competition with the West "in this war of attrition"

Andrei Klepach said this at a meeting of the Nikitsky Club on May 21; The Moscow Times drew attention to the transcript of the meeting.

The chief economist of the state corporation believes that the Russian economy is falling further and further behind China and the United States, and in some areas is even losing to Ukraine’s economy, which continues to function thanks to massive Western aid: "unpleasant as that may be, including for me personally."

"We will not win the competition in this war of attrition. We have the illusion that everything over there will collapse. It has not collapsed and it will not collapse. Our costs are mounting," Klepach noted.

According to him, Ukrainian strikes on ports, the oil and gas and chemical industries, as well as logistics infrastructure, have already become a "noticeable macroeconomic barrier to growth." This could limit economic growth by 1–1.5%.

"The conflict in Ukraine involving NATO has already lasted longer than the Great Patriotic War, and there is still no end in sight. Both sides are increasing the intensity of their strikes, including against each other’s economies," he added.

Klepach believes that "the economy will endure, but a social crisis may arise, and precisely when no one particularly expects it."

"But no one expected, let me remind you, the February Revolution either. Lenin wrote in December 1916 that ‘we will not live to see it,’ but he did live to see it just a few months later. The situation in the Soviet Union in 1991: we were moving toward it for a long time and consistently, and everyone understood that we were heading toward a crisis, but there was no fatal inevitability that the Union had to collapse," he concluded.

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