MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia anticipates an average key rate of 13% to 15% by 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 was set at 14%. The forecast indicates a scenario with inflationary pressures that are stronger than those considered in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia predicts that inflation will reach its 4% target in 2028. It estimates an average key rate of 11% to 12% for that year. Subsequently, the rate range is projected to decrease to 8.5% to 9.5% in 2029, with annual inflation maintained at 4%.
Economic growth is expected to stay moderate throughout the forecast period, based on the same assumptions. The central bank forecasts Russian GDP growth at 1% to 2% in 2027. For 2028, it sees growth between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. The scenario for 2026 indicates GDP growth ranging from zero to 1%, with inflation rates between 6% and 7%.
Higher interest rate path under proinflationary forecast
This proinflationary outlook assumes increased domestic demand and slower supply growth compared to the baseline scenario. It also accounts for more gradual expansion of production capacity and ongoing inflation expectations. The scenario features higher wage increases relative to productivity, as well as intensified competition for labor. Additionally, the Bank of Russia considers heightened protectionism, increased fiscal measures supporting demand, and stronger sanctions pressures as part of this scenario’s assumptions.
These conditions lead to a projected interest rate trajectory that is higher than the central bank’s baseline forecast. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4% that year. Conversely, the disinflationary scenario predicts a 2027 average key rate of 9% to 11%, with inflation falling within 3% to 4%.
Interest rate held steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from earlier levels. Official data confirmed that the 14% rate was maintained through August 31. This key rate is Russia’s primary monetary policy instrument for managing inflation and financial stability. The central bank continues to target a 4% annual inflation rate as part of its medium-term policy strategy.
The policy guidelines also feature a separate risk scenario characterized by considerably higher inflation and interest rates. Under this scenario, the average key rate could reach 19% to 21% in 2027, with annual inflation projected at 11% to 13%. Therefore, the 13% to 15% range pertains solely to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s 2027 to 2029 planning framework.