MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts that its average key rate will be between 13% and 15% in 2027 under a scenario characterized by ongoing inflation pressures. This projection is detailed in its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank’s current key rate remains at 14%, based on official data. The scenario assumes that domestic demand will stay robust, supply growth will slow down, and inflation pressures will be more persistent than in the baseline outlook.
In this proinflation scenario, annual inflation is expected to reach between 4.5% and 5.5% in 2027. The Bank of Russia predicts that inflation will revert to its 4% target in 2028. The average key rate is projected to be in the range of 11% to 12% for 2028. In 2029, it is expected to decrease to a forecasted range of 8.5% to 9.5%, while inflation remains steady at 4%.
Russia’s gross domestic product is projected to expand by 1% to 2% in 2027 under this scenario. Growth estimates for 2028 are between 0.5% and 1.5%, and for 2029, between 1.5% and 2.5%. For 2026, the central bank anticipates GDP growth will be between zero and 1%. The forecast for annual inflation in 2026 is between 6% and 7%, with the average key rate at 14.5% to 14.6%.
Inflation Risks Push Rates Higher
The proinflation scenario presumes domestic demand will stay stronger than in the central bank’s baseline forecast. It also considers slower supply growth and tighter production capacity. Additional assumptions include elevated inflation expectations, increased protectionist measures, and higher fiscal support for overall demand. The Bank of Russia also takes into account increased sanctions pressure, which could limit access to technology and hinder productivity and production potential.
The projected average key rate of 13% to 15% for 2027 surpasses the baseline range. Under the baseline scenario, the Bank of Russia estimates an average rate of 10.5% to 12.5% for the following year. It expects inflation to return to 4% in 2027. The disinflation scenario suggests an average 2027 key rate of 9% to 11%, with inflation between 3% and 4%.
The Current Key Rate Remains at 14%
In late July, the Bank of Russia reduced its key rate to 14%, down from 14.25%. Official daily figures indicated that the 14% rate persisted through August 31. The central bank had significantly lowered the rate from the 21% level observed during the first half of 2025. Its monetary policy primarily uses the key rate as the main tool to keep annual inflation close to the 4% target.
The guidelines for 2027 to 2029 also feature a separate risk scenario with notably higher interest rates and inflation. In that scenario, the average key rate is projected at 19% to 21% in 2027, with annual inflation at 11% to 13%. The proinflation forecast remains distinct from both that risk case and the central bank’s baseline outlook. These projections are part of the Bank of Russia’s medium-term framework for economic growth, inflation, and monetary policy.