MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia predicts an average key rate ranging from 13% to 15% in 2027 under a scenario characterized by persistent inflation. This projection is outlined in its Monetary Policy Guidelines for 2027 to 2029. Currently, the central bank maintains its key rate at 14%, based on data through August 31. The forecast assumes heightened domestic demand, slower supply growth, and more enduring inflationary pressures than the baseline outlook.
Under this proinflationary 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 average key rate is projected to fall within the range of 11% to 12% in 2028, before decreasing further to an estimated 8.5% to 9.5% in 2029, while inflation remains steady at 4%.
The central bank’s forecast for Russia’s gross domestic product (GDP) indicates growth between 1% and 2% in 2027 under this scenario. It estimates expansion of 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the GDP growth projection is between zero and 1%. Inflation for 2026 is forecast at 6% to 7%, with the key rate averaging 14.5% to 14.6%.
Inflation scenario sustains elevated rates
The proinflation outlook presumes domestic demand will remain more robust than in the central bank’s baseline forecast. It also considers slower growth in supply and tighter production capacity. Additional assumptions include rising inflation expectations, increased protectionist policies, 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 potential output.
The forecast of a 13% to 15% average key rate for 2027 exceeds the baseline estimate. Under the baseline scenario, the Bank of Russia expects an average rate of 10.5% to 12.5% in the following year. It projects inflation to return to 4% by 2027. The disinflationary scenario indicates a 2027 average key rate of 9% to 11%, with inflation between 3% and 4%.
Current key rate remains at 14%
The Bank of Russia lowered its key rate to 14% in late July after previously maintaining it at 14.25%. Official daily figures 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. Its monetary policy primarily relies on the key rate to keep annual inflation near the 4% target.
The 2027 to 2029 guidelines also incorporate a separate risk scenario featuring substantially higher interest rates and inflation. In that case, the average key rate is projected at 19% to 21% in 2027, with annual inflation between 11% and 13%. The proinflation forecast remains distinct from both this risk case and the baseline outlook. These projections form part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.