MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia estimates that the average key rate will be between 13% and 15% in 2027, according to 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 assumes a higher inflation pressure compared to the bank’s baseline economic outlook.
Under this proinflationary outlook, annual inflation is projected to be within 4.5% to 5.5% in 2027, with expectations that inflation will hit the 4% target in 2028. The forecast indicates an average key rate of 11% to 12% for that year, decreasing to 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Economic growth across this period would stay moderate based on the same assumptions. The central bank predicts Russia’s GDP will expand by 1% to 2% in 2027, with growth in 2028 expected to be between 0.5% and 1.5%, and from 1.5% to 2.5% in 2029. For 2026, the scenario indicates GDP growth between zero and 1%, with inflation rates fluctuating from 6% to 7% annually.
Proinflationary outlook suggests a higher trajectory for interest rates
This scenario presumes increased domestic demand and slower growth in supply compared to the baseline, along with more restrained expansion of production capacity and persistent inflation expectations. It also accounts for wages rising faster than productivity, heightened competition for labor, and factors such as increased protectionism, greater fiscal measures to stimulate demand, and intensified sanctions pressures among the underlying assumptions.
These conditions lead to a projected interest rate path that surpasses the central bank’s baseline forecast, which estimates an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4% that year. Conversely, under the separate disinflationary scenario, the average key rate for 2027 would fall within 9% to 11%, and inflation would be within a 3% to 4% range.
Key interest rate remains at 14%
The Bank of Russia kept its key rate steady at 14% in July 2026, following a series of earlier reductions, with official data confirming the rate stayed at that level through August 31. This rate functions as Russia’s primary monetary policy instrument for controlling inflation and financial stability, with a consistent target of 4% annual inflation guiding the central bank’s medium-term strategy.
Furthermore, the guidelines include a separate risk scenario characterized by notably higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027 and annual inflation between 11% and 13%. Therefore, the 13% to 15% forecast applies exclusively to the proinflationary scenario, not to the baseline or risk case outlined in the Bank of Russia’s framework for 2027 to 2029.