MOSCOW, RUSSIA / RankWire.AI / – According to Bank of Russia, an average key rate of 13% to 15% is anticipated for 2027 under its scenario emphasizing inflationary pressures. This forecast is part of the central bank’s Monetary Policy Guidelines for the years 2027 to 2029. As of the end of August 2026, Russia’s primary interest rate stood at 14%. The scenario accounts for increased inflationary forces compared to those outlined in the bank’s baseline economic outlook.
Under this proinflationary scenario, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia anticipates reaching its 4% inflation target in 2028 within this context. It estimates an average key rate of 11% to 12% for that year. By 2029, the projected interest rate will decrease to a range of 8.5% to 9.5%, with inflation remaining steady at 4%.
Economic growth is projected to stay moderate throughout the forecast period based on the same assumptions. The central bank forecasts Russia’s GDP to grow by 1% to 2% in 2027. For 2028, growth is expected to be between 0.5% and 1.5%, and in 2029, it could reach 1.5% to 2.5%. For 2026, the scenario suggests GDP expansion between zero and 1%, with annual inflation rates ranging from 6% to 7%.
Higher rate path under proinflationary scenario
The scenario emphasizing inflation presumes increased domestic demand paired with weaker supply growth compared to the baseline. It also incorporates slower growth in production capacity and persistent inflation expectations. Additionally, stronger wage increases relative to productivity, heightened competition for labor, and greater protectionism are included in the scenario assumptions. The framework also considers increased fiscal stimulus and intensified sanctions pressure.
Such conditions lead to a higher projected interest rate trajectory than the central bank’s baseline outlook. The baseline scenario estimates an average key rate of 10.5% to 12.5% in 2027, with inflation expected at 4%. Conversely, the disinflationary scenario predicts an average 2027 key rate of 9% to 11%, with inflation falling within 3% to 4%.
The key rate remains at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, marking a continuation of previous reductions from higher levels. Official data indicates that the rate remained at 14% through August 31. This rate functions as Russia’s primary monetary policy instrument to control inflation and manage financial stability. The central bank continues to adhere to a 4% inflation target as the core reference for its medium-term policy approach.
A separate risk scenario outlined in the guidelines projects considerably higher inflation and interest rates. Under this alternative, the average key rate is expected to be between 19% and 21% in 2027, while annual inflation could reach 11% to 13% during the same period. Therefore, the 13% to 15% estimate is specific to the proinflationary scenario and does not apply to the baseline or risk case detailed in the Bank of Russia’s framework for 2027 to 2029.