MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates that the average key rate will range from 13% to 15% in 2027 in its proinflationary scenario. This projection is part of the central bank’s Monetary Policy Guidelines for 2027 to 2029. As of the end of August 2026, Russia’s main interest rate stood at 14%. The forecast accounts for increased inflationary pressures compared to the bank’s baseline economic outlook.
Under this proinflation scenario, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia forecasts inflation will hit its 4% target in 2028, with an average key rate of 11% to 12% for that year. By 2029, the range decreases to 8.5% to 9.5%, while inflation remains at 4%.
Economic growth is expected to stay modest throughout the forecast period under these assumptions. The central bank projects Russia’s GDP will expand by 1% to 2% in 2027, with growth figures of 0.5% to 1.5% in 2028, and 1.5% to 2.5% in 2029. For 2026, the scenario estimates GDP growth between zero and 1%, with annual inflation rates between 6% and 7%.
Proinflationary scenario suggests a higher interest rate trajectory
This scenario assumes a boost in domestic demand coupled with slower supply growth compared to the baseline, along with a sluggish expansion of production capacity and ongoing inflation expectations. It also features higher wages relative to productivity, increased labor market competition, greater protectionist measures, increased fiscal stimulus for demand, and intensified sanctions pressure.
These factors contribute to a projected interest rate path that exceeds the baseline forecast. The central bank’s baseline expects an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. In contrast, a separate disinflation scenario envisions a 2027 average key rate of 9% to 11%, with inflation expected between 3% and 4%.
Interest rate held steady at 14% in July 2026
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of earlier cuts. Official data confirmed that the 14% rate remained in place through August 31. This rate serves as Russia’s primary monetary policy instrument for controlling inflation and economic conditions. The central bank maintains a 4% annual inflation target as the cornerstone of its medium-term policy framework.
Additionally, the guidelines include a separate risk scenario with significantly higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027. This scenario also estimates annual inflation at 11% to 13% for that year. Consequently, the 13% to 15% forecast applies solely to the proinflationary scenario, not the baseline forecast or the risk case outlined in the Bank of Russia’s 2027 to 2029 framework.