MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key rate between 13% and 15% in 2027 under a scenario that emphasizes persistent inflation. This estimate is part of its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank maintains its current key rate at 14%, based on available data. The scenario presumes increased domestic demand, subdued supply growth, and more enduring inflation pressures compared to the baseline projection.
Within this proinflationary framework, annual inflation is expected to range from 4.5% to 5.5% in 2027. The Bank of Russia anticipates inflation will revert to its 4% target in 2028. The forecast for the average key rate in 2028 is between 11% and 12%. Subsequently, it is projected to decline to a range of 8.5% to 9.5% in 2029, with inflation maintaining at 4%.
Under this scenario, Russia’s gross domestic product is expected to grow by 1% to 2% in 2027. The growth rate is forecasted at 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the central bank’s projection shows GDP expanding between zero and 1%. The inflation rate for 2026 is forecast at 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation Outlook Suggests Elevated Rates
The proinflation scenario assumes domestic demand will stay stronger than in the central bank’s baseline outlook. It also considers slower supply growth and tighter production capacity. Additional assumptions include rising inflation expectations, increased protectionist measures, and higher fiscal support for aggregate demand. The Bank of Russia also accounts for intensified sanctions pressure, which could hinder access to technology and limit productivity and production capacity.
The forecast of a 13% to 15% average key rate for 2027 exceeds the baseline range. According to the baseline scenario, the Bank of Russia expects an average rate of 10.5% to 12.5% in the upcoming year. The baseline inflation projection indicates a return to 4% in 2027. The disinflationary scenario estimates an average key rate of 9% to 11% for 2027, with inflation between 3% and 4%.
Current Key Rate Stands at 14%
In late July, the Bank of Russia lowered its key rate to 14%, having previously maintained it at 14.25%. Official daily data confirmed that the 14% rate persisted through August 31. The central bank had significantly reduced the rate from the 21% level recorded during the first half of 2025. The key rate is the main tool the Bank of Russia uses within its monetary policy framework to keep annual inflation near its 4% target.
The guidelines for 2027 to 2029 also outline a risk scenario with notably higher interest rates and inflation. This alternative scenario projects an average key rate of 19% to 21% in 2027 and an annual inflation rate of 11% to 13%. The proinflation forecast remains separate from both this risk scenario 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.