MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia anticipates an average key rate of 13% to 15% in 2027 under its proinflationary scenario. This forecast is part of the central bank’s Monetary Policy Guidelines for 2027 to 2029. At the end of August 2026, Russia’s key interest rate was 14%. The scenario assumes stronger inflation pressures than those in the bank’s baseline economic outlook.
The proinflationary scenario estimates annual inflation of 4.5% to 5.5% in 2027. The Bank of Russia expects inflation to hit its 4% target in 2028 under this scenario. It projects an average key rate of 11% to 12% in 2028. By 2029, the range drops to 8.5% to 9.5%, with inflation remaining at 4%.
Economic growth is expected to stay moderate throughout the forecast period under these assumptions. The central bank predicts Russia’s GDP will grow by 1% to 2% in 2027. It sees growth between 0.5% and 1.5% in 2028 and from 1.5% to 2.5% in 2029. For 2026, the scenario estimates GDP growth between zero and 1%, with inflation ranging from 6% to 7% annually.
Proinflationary outlook suggests higher interest rates
This scenario assumes increased domestic demand and slower supply growth compared to the baseline. It also factors in slower expansion of production capacity and ongoing inflation expectations. The framework includes stronger wage growth relative to productivity and more competition for labor. The Bank of Russia also considers increased protectionism, higher fiscal support for demand, and intensified sanctions among its assumptions.
These conditions lead to a projected interest rate path higher than the central bank’s baseline forecast. The baseline expects an average key rate of 10.5% to 12.5% in 2027, with inflation at 4% that year. Under a separate disinflationary scenario, the 2027 key rate would range from 9% to 11%, and inflation would be between 3% and 4%.
The key rate stays at 14%
In July 2026, the Bank of Russia reduced its key rate to 14%, continuing a series of cuts from earlier levels. Official data shows the 14% rate remained in effect through August 31. The key rate is Russia’s main tool for controlling inflation and financial conditions. The central bank still uses a 4% annual inflation target as its medium-term reference point.
The guidelines include a separate risk scenario with much higher inflation and interest rates. That scenario projects an average key rate of 19% to 21% in 2027. It also estimates annual inflation of 11% to 13% for the same year. Therefore, the 13% to 15% projection is specific to the proinflationary scenario, not the baseline or risk scenarios outlined in the Bank of Russia’s 2027 to 2029 plan.