MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates that its average key rate will be between 13% and 15% in 2027 under a scenario characterized by persistent inflationary pressures. This projection is outlined in its Monetary Policy Guidelines for 2027 to 2029. Presently, the central bank maintains its key rate at 14%, based on data through August 31. The scenario presumes stronger domestic demand, slower supply growth, and more enduring inflationary forces than the baseline forecast.
Under the proinflation scenario, the forecast for annual inflation in 2027 ranges from 4.5% to 5.5%. The Bank of Russia expects inflation to revert to its 4% target by 2028. The projected average key rate is 11% to 12% for 2028, decreasing to a range of 8.5% to 9.5% in 2029, with inflation remaining at 4%.
Russia’s gross domestic product (GDP) is expected to expand between 1% and 2% in 2027 under this scenario. Growth is forecasted at 0.5% to 1.5% for 2028, and 1.5% to 2.5% in 2029. For 2026, the central bank projects GDP growth in the range of zero to 1%. Inflation for 2026 is forecasted at 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation Outlook Supports Elevated Rates
The proinflation scenario assumes domestic demand will remain stronger than the central bank’s baseline forecast. It also considers slower supply expansion and tighter production capacity. Additional assumptions include heightened inflation expectations, increased protectionist measures, and greater fiscal support for aggregate demand. The Bank of Russia also accounts for increased sanctions pressure, which could limit access to technology and hinder productivity and output potential.
The anticipated 13% to 15% average key rate in 2027 exceeds the baseline estimate. According to the baseline scenario, the Bank of Russia projects an average rate of 10.5% to 12.5% in the upcoming year. The baseline inflation forecast expects a return to 4% in 2027. A disinflationary outlook indicates an average 2027 key rate of 9% to 11%, with inflation between 3% and 4%.
Current Rate Holds at 14%
The Bank of Russia lowered its key rate to 14% in late July, following a previous level of 14.25%. Official daily figures confirmed the 14% rate remained in effect through August 31. The central bank had sharply reduced rates from the 21% level seen during the first half of 2025. The key rate functions as the primary tool within its monetary policy framework to keep annual inflation near the 4% target.
The 2027 to 2029 guidelines include an alternative risk scenario with significantly higher interest rates and inflation. This scenario projects an average key rate of 19% to 21% in 2027, with annual inflation of 11% to 13%. The proinflation forecast remains distinct from this risk case and the central bank’s baseline outlook. These projections are part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.