MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts its average key rate will be in the 13% to 15% range in 2027, based on a proinflationary scenario. This projection is part of its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the bank has kept its key rate steady at 14%, according to official data. The scenario assumes a rise in domestic demand, slower growth in supply, and more persistent inflationary pressures than the baseline outlook.
Under this proinflation scenario, annual inflation is anticipated to be between 4.5% and 5.5% in 2027. The Bank of Russia expects inflation to revert to its 4% target by 2028. The forecast for the average key rate in 2028 is 11% to 12%, decreasing further to a projected 8.5% to 9.5% in 2029, with inflation remaining at 4%.
According to the projections, Russia’s gross domestic product (GDP) is expected to grow between 1% and 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 forecasts GDP expansion to be between zero and 1%, with annual inflation for that year at 6% to 7%, and the average key rate at 14.5% to 14.6%.
Inflation Expectations Lead to Elevated Rates
The proinflation scenario assumes domestic demand will stay stronger than under the central bank’s baseline forecast, alongside slower supply growth and tighter production capacity. Additional assumptions include heightened inflation expectations, increased protectionist policies, and more substantial fiscal support for overall demand. The Bank of Russia also considers greater sanctions pressure, which could limit access to technology and hinder productivity and output capacity.
The forecast of an average key rate between 13% and 15% in 2027 surpasses the baseline range. Under the baseline scenario, the Bank of Russia projects an average rate of 10.5% to 12.5% for the following year. It expects inflation to return to 4% in 2027. Conversely, the disinflation scenario estimates an average 2027 key rate of 9% to 11%, with inflation between 3% and 4%.
Current Key Rate Maintained at 14%
The Bank of Russia reduced its key rate to 14% in late July, after previously maintaining it at 14.25%. Official daily data indicated that the 14% rate remained in effect through August 31. The central bank had previously cut the rate significantly from the 21% level recorded during the first half of 2025. The main tool in its monetary policy framework is the key rate, used to keep annual inflation close to the 4% target.
The 2027 to 2029 policy guidelines also include an alternative risk scenario featuring considerably higher interest rates and inflation. In that case, the average key rate is projected at 19% to 21% for 2027, with inflation estimated at 11% to 13%. The proinflation forecast remains distinct from both the risk case and the central bank’s baseline outlook. These projections form part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.