MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia forecasts an average key rate between 13% and 15% in 2027 within its proinflationary scenario, which 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 maintained at 14%. This projection reflects a scenario where inflationary pressures are stronger than those incorporated in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027, with the Bank of Russia predicting that inflation will meet its 4% target by 2028. The forecast indicates an average key rate of 11% to 12% in 2028, which then decreases to 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
Economic growth is projected to remain modest throughout the forecast period under these assumptions. The central bank estimates Russia’s GDP will increase by 1% to 2% in 2027, with growth slowing to 0.5% to 1.5% in 2028 and accelerating slightly to 1.5% to 2.5% in 2029. For 2026, the scenario suggests GDP growth between zero and 1%, with inflation rates ranging from 6% to 7% annually.
Proinflationary scenario indicates a higher trajectory for interest rates
This scenario assumes that domestic demand will be stronger while supply growth remains subdued compared to the baseline, coupled with slower expansion of productive capacity and persistent inflation expectations. It also incorporates greater wage increases relative to productivity, heightened competition for labor, increased protectionism, elevated fiscal measures supporting demand, and intensified sanctions pressure, all of which contribute to a higher projected path for interest rates than the central bank’s baseline forecast. The baseline scenario expects an average key rate of 10.5% to 12.5% in 2027, alongside inflation at 4%. Conversely, the disinflationary scenario forecasts an average rate of 9% to 11% for 2027, with inflation falling into the 3% to 4% range.
The key rate is maintained at 14%
In July 2026, the Bank of Russia lowered its key rate to 14%, extending a series of cuts from previous levels, and official data confirmed that this rate persisted through August 31. The key rate is the main monetary policy instrument used by Russia to regulate inflation and financial conditions, with the bank continuing to target a 4% annual inflation rate as part of its medium-term policy framework. The guidelines also feature a separate risk scenario characterized by significantly higher inflation and interest rates, projecting an average key rate of 19% to 21% in 2027, with annual inflation estimated at 11% to 13% during the same year. Therefore, the 13% to 15% forecast applies solely to the proinflationary scenario and does not encompass the baseline or risk scenarios outlined in the Bank of Russia’s framework for 2027 to 2029.