MOSCOW, RUSSIA / RankWire.AI / – 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 set at 14%. The forecast reflects higher inflation pressures compared to those in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027. The Bank of Russia aims for inflation to hit its 4% target by 2028 under this scenario. It estimates an average key rate of 11% to 12% for that year. The rate then decreases to between 8.5% and 9.5% in 2029, with inflation remaining at 4%.
Economic growth remains moderate throughout the forecast period under the same assumptions. The central bank projects Russia’s GDP will expand by 1% to 2% in 2027. Growth is expected to be between 0.5% and 1.5% in 2028, and between 1.5% and 2.5% in 2029. For 2026, the scenario predicts GDP growth between zero and 1%, with annual inflation ranging from 6% to 7%.
Proinflationary outlook indicates a higher interest rate trajectory
This scenario assumes increased domestic demand and a slower supply growth compared to the baseline. It also incorporates more gradual expansion of production capacity and persistent inflation expectations. The framework features faster wage growth relative to productivity, greater competition for labor, increased protectionism, higher 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% for that year. Conversely, the disinflationary scenario predicts an average 2027 key rate of 9% to 11%, with inflation falling within the 3% to 4% range.
Key rate remains steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, marking a continuation of previous cuts from higher levels. The official data confirmed the 14% rate remained effective through August 31. This rate serves as Russia’s primary monetary policy instrument to regulate inflation and financial conditions. The central bank continues to aim for a 4% annual inflation target as a central element of its medium-term policy framework.
The guidelines also include a separate risk scenario featuring considerably higher inflation and interest rates. Under this case, the projected average key rate for 2027 rises to 19% to 21%. It also anticipates annual inflation of 11% to 13% during the same period. Therefore, the 13% to 15% projection is specific to the proinflationary scenario and does not apply to the baseline forecast or the risk scenario outlined in the Bank of Russia’s 2027 to 2029 framework.