MOSCOW, RUSSIA / RankWire.AI / – In Moscow, in 2027, the Bank of Russia anticipates an average key rate ranging from 13% to 15% under its proinflationary scenario. This forecast is part of the central bank’s Monetary Policy Guidelines covering 2027 to 2029. As of the end of August 2026, Russia’s key interest rate was maintained at 14%. The scenario assumes heightened inflation pressures beyond those reflected in the bank’s baseline economic outlook.
Under this proinflationary outlook, annual inflation is projected to be between 4.5% and 5.5% in 2027. The Bank of Russia expects inflation to reach its 4% target in 2028 within this scenario, with an average key rate forecast of 11% to 12%. In 2029, the rate is expected to decrease to between 8.5% and 9.5%, while inflation remains steady at 4%.
Economic growth is forecasted to stay moderate across the projection period based on the same assumptions. The central bank predicts Russian GDP expansion of 1% to 2% in 2027, 0.5% to 1.5% in 2028, and 1.5% to 2.5% in 2029. For 2026, the scenario indicates GDP growth between zero and 1%, with inflation rates ranging from 6% to 7% annually.
Higher Rate Path Under Proinflationary Expectations
This proinflationary outlook assumes increased domestic demand and weaker supply growth compared to the baseline. It also factors in slower expansion of production capacity and persistent inflation expectations. The scenario incorporates faster wage growth relative to productivity, along with heightened competition for labor. Furthermore, greater protectionism, enhanced fiscal stimulus for demand, and intensified sanctions are among the assumptions guiding this outlook.
These conditions lead to a projected interest rate trajectory higher than the central bank’s baseline forecast. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027, with inflation at 4%. Conversely, under the disinflationary scenario, the 2027 average key rate is projected between 9% and 11%, with inflation anticipated within the 3% to 4% range.
Key Rate Maintained at 14%
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 the 14% rate persisted through August 31. The key rate functions as Russia’s primary monetary policy instrument for controlling inflation and financial stability. The central bank continues to aim for a 4% annual inflation target as a core component of its medium-term policy approach.
Additionally, the guidelines include a distinct risk scenario with significantly 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% range is specific to the proinflationary scenario, not applicable to the baseline or risk scenarios outlined in the Bank of Russia’s 2027 to 2029 framework.