MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates an average key rate ranging from 13% to 15% in 2027, based on its proinflationary scenario. This forecast 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 scenario accounts for more intense inflationary pressures than those considered in the bank’s baseline economic forecast.
The proinflationary scenario estimates annual inflation between 4.5% and 5.5% in 2027. Under this outlook, the Bank of Russia expects inflation to meet its 4% target in 2028. It forecasts an average key rate of 11% to 12% for that year, with the rate then decreasing to a range of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Economic growth is projected to stay moderate throughout the forecast period under the same assumptions. The central bank estimates Russia’s GDP growth at 1% to 2% in 2027, with growth slowing to 0.5% to 1.5% in 2028, and then increasing to 1.5% to 2.5% in 2029. For 2026, the scenario places GDP growth between zero and 1%, with annual inflation expected to be between 6% and 7%.
Proinflationary outlook indicates a higher rate trajectory
Stronger domestic demand, coupled with weaker supply growth than in the baseline case, is assumed in the proinflationary scenario. This outlook also incorporates a slower expansion of productive capacity and persistent inflation expectations. It includes faster wage growth relative to productivity, increased competition for labor, higher protectionism, greater fiscal support to sustain demand, and intensified sanctions pressure among the underlying assumptions.
These conditions lead to a projected interest rate path that is higher than the central bank’s baseline forecast. The baseline scenario projects an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4%. Conversely, the disinflationary scenario indicates an average 2027 key rate between 9% and 11%, with inflation falling within a 3% to 4% range.
Rate steady at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from prior levels. Official data confirmed that the 14% rate remained in effect through August 31. This rate functions as Russia’s primary monetary policy instrument to control inflation and financial stability. The bank maintains a 4% annual inflation target as a reference for its medium-term policy approach.
A separate risk scenario predicts significantly higher inflation and interest rates, with an average key rate of 19% to 21% in 2027. Under this case, annual inflation could reach 11% to 13% during the same year. Consequently, the 13% to 15% forecast applies solely to the proinflationary scenario, not the baseline or risk scenarios outlined within the Bank of Russia’s framework for 2027 to 2029.