MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts its average key rate to range from 13% to 15% in 2027 assuming a proinflationary environment. This outlook is detailed in its Monetary Policy Guidelines for 2027 to 2029. Currently, the central bank maintains its key rate at 14%, based on data available through August 31. The scenario presumes increased domestic demand, weaker supply expansion, and more persistent inflationary pressures than the baseline projection.
Within this proinflationary framework, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia anticipates inflation will return to its 4% target in 2028. The average key rate is projected to be in the 11% to 12% range for that year. It then declines to a forecasted interval of 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
According to the projections, Russia’s gross domestic product could grow by 1% to 2% in 2027. Growth estimates for 2028 fall between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. For 2026, the central bank anticipates GDP expansion to be between zero and 1%. The expected annual inflation for that year is 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation Outlook Keeps Rates Elevated
The proinflation scenario assumes domestic demand will stay stronger than in the bank’s baseline forecast. Additionally, it considers slower growth in supply and tighter capacity in production. Other assumptions include increased inflation expectations, more protectionist measures, and higher fiscal support to stimulate aggregate demand. The Bank of Russia also accounts for increased sanctions pressure, which could restrict access to technology and limit productivity and production capacity.
The forecast of a 13% to 15% average key rate for 2027 exceeds the baseline range. Under the baseline scenario, the Bank of Russia expects an average rate of 10.5% to 12.5% in the next year. This scenario projects inflation to return to 4% in 2027. Conversely, the disinflation scenario estimates an average key rate of 9% to 11% for 2027, with inflation between 3% and 4%.
Current Rate Remains at 14%
In late July, the Bank of Russia lowered its key rate to 14%, after previously setting it at 14.25%. Official daily data confirmed the 14% rate remained in effect through August 31. The rate was significantly reduced from the 21% level recorded during the first half of 2025. The central bank relies on the key rate as its primary tool for maintaining annual inflation near the 4% target.
The 2027 to 2029 guidelines also present a risk scenario with notably higher interest rates and inflation. That scenario forecasts an average key rate of 19% to 21% in 2027, with inflation expected to be between 11% and 13%. The proinflation forecast remains distinct from both the risk case and the central bank’s baseline outlook. These projections form part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.