MOSCOW, RUSSIA / RankWire.AI / – According to Bank of Russia, the average key rate is expected to be between 13% and 15% in 2027, assuming a scenario characterized by persistent inflation. These projections are detailed in its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank has kept its key rate steady at 14%, based on the latest available data. The forecast scenario considers heightened domestic demand, slower supply growth, and more enduring inflationary pressures compared to the baseline outlook.
Under this proinflation scenario, the annual inflation rate is projected to range from 4.5% to 5.5% in 2027. The Bank of Russia expects inflation to stabilize around its 4% target by 2028, with inflation forecasted to decrease accordingly. The average key rate is anticipated to be between 11% and 12% in 2028, then declining to a range of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
The GDP of Russia is projected to expand by 1% to 2% in 2027 in this scenario. Growth estimates for 2028 sit between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. For 2026, the central bank forecasts GDP growth to be between zero and 1%, with annual inflation expected to be between 6% and 7%, and the key rate averaging around 14.5% to 14.6%.
Inflation Outlook Maintains Elevated Rates
The proinflation scenario assumes domestic demand will stay stronger than in the central bank’s baseline forecast, coupled with slower supply expansion and tighter capacity. It also factors in increased inflation expectations, a rise in protectionist policies, and enhanced fiscal measures to support overall demand. Additionally, the Bank of Russia considers heightened sanctions pressure, which could limit access to technology and hinder productivity and output capacity.
The forecasted average key rate of 13% to 15% for 2027 exceeds the baseline range. Under the baseline scenario, the Bank of Russia projects an average rate of 10.5% to 12.5% for the following year. It also expects inflation to return to 4% by 2027. The disinflationary scenario predicts a 2027 average key rate of 9% to 11%, with inflation between 3% and 4%.
Current Rate Held at 14%
In late July, the Bank of Russia reduced its key rate from 14.25% to 14%, where it has remained according to official daily data through August 31. This marks a significant reduction from the 21% level observed during the first half of 2025. The central bank’s monetary policy primarily relies on the key rate to keep annual inflation close to its 4% target.
The guidelines for 2027 to 2029 also include a risk scenario with notably higher interest rates and inflation. In this case, the average key rate could reach 19% to 21% in 2027, with inflation projected at 11% to 13%. The proinflation forecast remains distinct from both this risk scenario and the central bank’s baseline outlook. These projections are integral to the Bank of Russia’s medium-term framework covering inflation, economic growth, and monetary policy.