MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key rate of 13% to 15% in 2027, based on 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 remained at 14%. The forecast considers increased inflationary pressures compared to the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia predicts that inflation will hit its 4% target in 2028 under this scenario, with an anticipated average key rate of 11% to 12% for that year. The projected range then narrows to 8.5% to 9.5% in 2029, with inflation remaining steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period under the same assumptions. The central bank estimates Russian GDP expansion of 1% to 2% in 2027, with growth rates of 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the scenario projects GDP growth between zero and 1%, with inflation rates from 6% to 7% annually.
Proinflationary outlook indicates a higher interest rate trajectory
The proinflationary scenario assumes stronger domestic demand coupled with slower supply growth compared to the baseline. It also factors in a slower expansion of production capacity and persistent inflation expectations. The framework includes faster wage growth relative to productivity, increased labor competition, and greater protectionism. Additionally, it considers higher fiscal support for demand and intensified sanctions pressure among its assumptions.
These conditions lead to a projected interest rate path that is higher than 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% that year. Conversely, under the disinflationary scenario, the average key rate for 2027 falls within 9% to 11%, with inflation expected to be between 3% and 4%.
Interest rate remains at 14% in July 2026
The Bank of Russia reduced its key rate to 14% in July 2026, continuing a series of cuts from previous levels. Official data indicates that this rate persisted through August 31. The key rate functions as Russia’s primary monetary policy tool for controlling inflation and financial conditions. The central bank maintains a 4% annual inflation target as a reference for its medium-term policy strategy.
The policy guidelines also feature a separate risk scenario with substantially higher inflation and interest rates. Under that scenario, the average key rate could reach 19% to 21% in 2027, with annual inflation projected at 11% to 13%. Therefore, the 13% to 15% estimate applies specifically to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.