MOSCOW, RUSSIA / RankWire.AI / – According to the Bank of Russia, its average key rate is expected to be in the range of 13% to 15% in 2027 under a scenario characterized by persistent inflation pressures. This forecast is detailed in its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank maintains its key rate at 14%, based on recent data. The scenario presumes increased domestic demand, weaker supply expansion, and more enduring inflationary forces compared to the baseline outlook.
Under this proinflation scenario, the forecast for annual inflation in 2027 ranges from 4.5% to 5.5%. The Bank of Russia anticipates inflation will revert to its 4% target in 2028. It projects the average key rate to fall between 11% and 12% in 2028, and further decrease to a range of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Projected economic growth for Russia’s gross domestic product (GDP) under this scenario is between 1% and 2% in 2027. Growth estimates for 2028 are between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. For 2026, the central bank forecasts GDP expansion of zero to 1%. Inflation for 2026 is expected to be between 6% and 7%, with the average key rate around 14.5% to 14.6%.
Inflation Outlook Supports Elevated Rates
The proinflation scenario assumes domestic demand will stay stronger than projected in the central bank’s baseline forecast. It also involves slower growth in supply and tighter production capacities. Additional assumptions include heightened inflation expectations, increased protectionist policies, and greater fiscal support for overall demand. The Bank of Russia also considers heightened sanctions pressure, which could hinder access to technology and limit productivity and potential output.
The forecast of a 13% to 15% average key rate in 2027 exceeds the baseline range, which predicts an average rate of 10.5% to 12.5% for the following year. The baseline scenario expects inflation to return to 4% in 2027. The disinflationary forecast suggests an average key rate of 9% to 11% in 2027, with inflation between 3% and 4%.
Current Key Rate Holds at 14%
The Bank of Russia lowered its key rate to 14% at the end of July, following a previous rate of 14.25%. Official daily data confirmed that the 14% rate remained in effect through August 31. This rate cut was a significant reduction from the 21% level recorded during the first half of 2025. The central bank’s monetary policy primarily relies on the key rate as the main tool to keep annual inflation near the 4% target.
The guidelines for 2027 to 2029 also present an alternative risk scenario featuring substantially higher interest rates and inflation. Under this scenario, the average key rate could reach 19% to 21% in 2027, with inflation projections at 11% to 13%. The proinflation forecast remains separate from both this risk scenario and the central bank’s baseline outlook. These projections are part of the Bank of Russia’s medium-term strategy for inflation control, economic growth, and monetary policy.