MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key interest rate of 13% to 15% in 2027 in 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 key rate was maintained at 14%. The forecast reflects inflationary pressures that are stronger than those considered in the bank’s baseline economic outlook.
Under the proinflationary scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027. The Bank of Russia anticipates inflation will reach its 4% target in 2028, with an average key rate projected at 11% to 12%. In 2029, this range is expected to decrease to 8.5% to 9.5%, while inflation remains steady at 4%.
Economic growth is expected to stay moderate throughout the forecast period, based on the same set of assumptions. The central bank estimates Russia’s GDP will expand by 1% to 2% in 2027. Growth is projected at 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the scenario predicts GDP growth between zero and 1%, with inflation expected to range from 6% to 7% annually.
Proinflationary Scenario Suggests Elevated Rate Trajectory
This proinflationary outlook assumes increased domestic demand and a slower pace of supply growth compared to the baseline scenario. It also factors in sluggish expansion of production capacity, alongside persistent inflation expectations. The framework incorporates higher wage growth relative to productivity, greater competition for labor, increased protectionism, enhanced fiscal measures to stimulate demand, and intensified sanctions pressure.
These conditions lead to a forecasted interest rate path that is higher than the central bank’s baseline estimate. The baseline scenario projects an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% for that year. Meanwhile, the disinflationary scenario estimates a 2027 average key rate between 9% and 11%, with inflation falling within a 3% to 4% range.
The Rate Will Stay at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from previous levels. Data from the central bank confirmed that the 14% rate persisted through August 31. The key rate remains Russia’s primary monetary policy instrument for controlling inflation and financial stability. The bank maintains a 4% annual inflation target as the guiding point for its medium-term policy framework.
Additionally, the guidelines include a separate risk scenario characterized by significantly higher inflation and interest rates. This alternative projects an average key rate of 19% to 21% in 2027, with annual inflation between 11% and 13%. Consequently, the 13% to 15% estimate applies solely to the proinflationary scenario, not the baseline or risk case outlined in the Bank of Russia’s framework for 2027 to 2029.