MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia forecasts its average key rate to be between 13% and 15% in 2027 under a proinflation scenario, as outlined in its Monetary Policy Guidelines for 2027 to 2029. Currently, the central bank maintains its key rate at 14%, according to data through August 31. This projection assumes heightened domestic demand, slower supply expansion, and more persistent inflation pressures compared to the baseline outlook.
Under this proinflation scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027. The inflation rate is anticipated to return to its 4% target by 2028. The average key rate is projected at 11% to 12% in 2028, decreasing to a range of 8.5% to 9.5% in 2029, while inflation stays around 4%.
For 2027, Russia’s gross domestic product (GDP) is expected to grow between 1% and 2%. Growth estimates for 2028 are between 0.5% and 1.5%, rising to 1.5% to 2.5% in 2029. The central bank forecasts GDP expansion of zero to 1% for 2026, with inflation projected at 6% to 7%, and the key rate at 14.5% to 14.6% for that year.
Proinflation Scenario Supports Elevated Rates
This scenario assumes domestic demand will remain stronger than in the central bank’s baseline forecast, with slower supply growth and constrained capacity. It also factors in rising inflation expectations, increased protectionism, and greater fiscal support for demand. Additionally, sanctions are expected to intensify, potentially limiting access to technology and hindering productivity and output growth.
The projected average key rate of 13% to 15% for 2027 exceeds the baseline range, which forecasts a rate of 10.5% to 12.5% in 2027. Under the baseline, inflation is expected to revert to 4%. A disinflationary outlook suggests a 2027 average rate of 9% to 11%, with inflation between 3% and 4%.
Current Rate Remains at 14%
In late July, the Bank of Russia reduced its key rate from 14.25% to 14%, which has remained in effect through August 31, according to official daily data. The rate had been cut significantly from the 21% level seen during the first half of 2025. The central bank relies on the key rate as its primary tool for keeping annual inflation near the 4% target.
The 2027 to 2029 outlook also considers a risk scenario with substantially higher interest rates and inflation, where the average key rate could reach 19% to 21% in 2027, and inflation might be 11% to 13%. This proinflation forecast remains distinct from both that risk scenario and the central bank’s baseline projection. These estimates are part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.