MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates an average key rate between 13% and 15% in 2027, assuming 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 indicates a scenario with increased inflationary pressures compared to the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to be within 4.5% to 5.5% in 2027. The Bank of Russia forecasts inflation will reach its 4% target in 2028, with an average key rate projected at 11% to 12% for that year. In 2029, the interest rate is expected to decrease to a range of 8.5% to 9.5%, while inflation remains at 4%.
Economic growth is projected to stay moderate throughout the forecast period, given the same set of assumptions. The central bank estimates GDP growth of 1% to 2% in 2027. For 2028, growth is expected to be between 0.5% and 1.5%, and between 1.5% and 2.5% in 2029. For 2026, the scenario places GDP growth between zero and 1%, with annual inflation ranging from 6% to 7%.
Proinflationary outlook indicates a higher interest rate trajectory
This scenario presumes stronger domestic demand paired with subdued supply growth relative to the baseline case. It also accounts for slower expansion of production capacity and ongoing inflation expectation pressures. The framework includes faster wage growth compared to productivity, along with increased labor market competition. Additionally, the Bank of Russia considers heightened protectionism, increased fiscal support for demand, and intensified sanctions as part of its scenario assumptions.
These conditions lead to a projected interest rate path that exceeds the central bank’s baseline forecast. The baseline scenario predicts an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. In contrast, the disinflationary scenario forecasts a 2027 average rate of 9% to 11%, with inflation dropping to a 3% to 4% range.
The key rate remains at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, extending a series of decreases from earlier levels. Official data from the central bank confirmed that the 14% rate was maintained through August 31. The key rate functions as Russia’s primary monetary policy instrument for controlling inflation and financial stability. The bank continues to target a 4% annual inflation rate as part of its medium-term policy framework.
The guidelines also incorporate a separate risk scenario that envisions significantly higher inflation and interest rates. Under this case, the projected average key rate in 2027 would be 19% to 21%, with annual inflation expected to be 11% to 13%. Consequently, the 13% to 15% forecast applies solely to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.