MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates that the average key rate will be between 13% and 15% in 2027, according to its proinflationary scenario. This projection is included in the central bank’s Monetary Policy Guidelines for 2027 to 2029. At the end of August 2026, Russia’s main interest rate was maintained at 14%. The forecast indicates a scenario with more pronounced inflationary pressures than those present in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is expected to hover between 4.5% and 5.5% in 2027. The Bank of Russia expects inflation to hit its 4% target in 2028 under the same assumptions, projecting an average key rate of 11% to 12% that year. By 2029, the range narrows to 8.5% to 9.5%, with inflation remaining steady at 4%.
Economic growth is forecasted to stay moderate throughout the forecast period, given the same set of assumptions. The central bank estimates Russia’s GDP growth at 1% to 2% in 2027. It expects growth to be between 0.5% and 1.5% in 2028, and from 1.5% to 2.5% in 2029. For 2026, the scenario predicts GDP expansion between zero and 1%, with annual inflation rates ranging from 6% to 7%.
Inflation Outlook with Elevated Rate Path
The proinflationary forecast assumes heightened domestic demand alongside weaker supply growth compared to the baseline. It also accounts for slower growth in production capacity and ongoing inflation expectation pressures. This framework incorporates increased wage growth relative to productivity, along with intensified labor market competition. Furthermore, the Bank of Russia considers increased protectionism, greater fiscal stimulus for demand, and intensified sanctions pressure as part of its scenario assumptions.
These conditions lead to a higher projected interest rate trajectory than the central bank’s baseline estimate. The baseline scenario anticipates an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4% that year. Conversely, the disinflationary scenario projects a 2027 average key rate between 9% and 11%, with inflation falling within a 3% to 4% range.
Key Rate Sustains at 14% in 2026
In July 2026, the Bank of Russia lowered its key rate to 14%, continuing a series of reductions from earlier levels. Official data confirmed that the 14% rate remained in effect through August 31. This rate acts as Russia’s primary monetary policy instrument for controlling inflation and financial stability. The central bank maintains a 4% annual inflation target as a cornerstone of its medium-term policy framework.
Additionally, the guidelines outline a separate risk scenario involving substantially higher inflation and interest rates. Under this alternative, the projected average key rate for 2027 ranges from 19% to 21%, with annual inflation rates between 11% and 13%. Consequently, the 13% to 15% estimate pertains exclusively to the proinflationary scenario, not the baseline or risk scenarios detailed in the Bank of Russia’s framework for 2027 to 2029.