Russia's state development bank VEB has fired its chief economist after remarks suggesting Russia could lose a 'war of attrition' against Ukraine and face a 'social crisis'. The economist's statements highlighted concerns about Russia's economic and technological sustainability. The firing comes amidst ongoing hostilities between Russia and Ukraine, with no formal ceasefire agreement in place. Recent market pricing for a ceasefire by the end of 2026 has shown a decline in optimism, dropping to 24.5% from 34% a week ago. This decline suggests that market participants may interpret the economist's ousting as an indication of internal instability and a reduced likelihood of a diplomatic resolution by the year's end.
Key Actors and Market Sentiment
The firing of a high-profile economist could indicate internal pressures that might influence future diplomatic or military strategies. Key actors such as Vladimir Putin and Volodymyr Zelensky remain central to the potential for any ceasefire or peace talks. Developments in U.S.-mediated negotiations or shifts in Russia's diplomatic stance could significantly impact market sentiment. Observers will be watching for any changes in Russia's public messaging or policy adjustments that might suggest a shift towards resolution or continued conflict.