MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key rate of 13% to 15% in 2027 within 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 14%. The forecast indicates a scenario with inflationary pressures that are more intense than those in the bank’s baseline economic outlook.
The proinflationary scenario envisions annual inflation between 4.5% and 5.5% in 2027. Under this scenario, the Bank of Russia expects inflation to reach its 4% target by 2028. It projects an average key rate of 11% to 12% for that year. The rate then decreases to a range of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period under these assumptions. The central bank estimates Russian GDP growth at 1% to 2% in 2027. For 2028, growth is anticipated to be between 0.5% and 1.5%, and from 1.5% to 2.5% in 2029. The scenario for 2026 projects GDP expansion of 0% to 1%, with inflation fluctuating from 6% to 7% annually.
Proinflationary outlook suggests higher interest rate trajectory
This scenario assumes a rise in domestic demand and a slower supply growth compared to the baseline. It also factors in a more gradual increase in production capacity and persistent inflation expectations. The framework incorporates faster wage growth relative to productivity, heightened competition for labor, increased protectionism, greater fiscal support for demand, and intensified sanctions pressure.
These conditions lead to a projected interest rate path 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 at 4%. Conversely, the disinflationary scenario predicts a 2027 average key rate of 9% to 11%, with inflation 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 previous levels. Official data indicates this rate remained in effect through August 31. The key rate functions as Russia’s primary monetary policy instrument for controlling inflation and financial stability. The bank maintains a 4% annual inflation target as the basis for its medium-term policy framework.
The guidelines also present an alternative risk scenario characterized by significantly higher inflation and interest rates. Under this scenario, the average key rate in 2027 could reach 19% to 21%. During the same year, inflation is expected to be between 11% and 13%. As a result, the 13% to 15% estimate applies solely to the proinflationary scenario, not to the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.