MOSCOW, RUSSIA / RankWire.AI / – Bank of Russia forecasts its average key rate to be between 13% and 15% in 2027 under a scenario that favors higher inflation. The projection appears in its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank maintains its key rate at 14%, based on data available through that date. This scenario assumes increased domestic demand, slower supply growth, and more persistent inflationary pressures than the baseline forecast.
In this proinflationary scenario, annual inflation is expected to range from 4.5% to 5.5% in 2027. The Bank of Russia anticipates inflation will return to its 4% target in 2028. The forecast for the average key rate in 2028 is between 11% and 12%. By 2029, it is projected to decrease to a range of 8.5% to 9.5%, with inflation remaining around 4%.
Russia’s gross domestic product (GDP) is forecasted to expand by 1% to 2% in 2027 under this scenario. Growth is expected to be between 0.5% and 1.5% in 2028 and between 1.5% and 2.5% in 2029. For 2026, the central bank predicts GDP growth will be between zero and 1%. The annual inflation rate for 2026 is projected to fall within 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation Outlook Keeps Rates Elevated
The proinflation scenario presumes domestic demand will stay stronger than in the central bank’s baseline forecast. It also expects slower supply growth and tighter production capacity. Additional assumptions include higher inflation expectations, increased protectionist policies, and greater fiscal support for overall demand. The Bank of Russia also considers increased sanctions pressure, which could hinder access to technology and limit productivity and growth potential.
The projected average key rate of 13% to 15% for 2027 exceeds the baseline range. Under the baseline outlook, the Bank of Russia estimates an average rate of 10.5% to 12.5% for next year. It also forecasts inflation returning to 4% in 2027. The disinflationary scenario estimates an average key rate of 9% to 11% for 2027, with inflation between 3% and 4%.
The Current Key Rate Remains at 14%
The Bank of Russia lowered its key rate to 14% in late July after previously setting it at 14.25%. Official daily figures confirmed that the 14% rate remained in effect through August 31. The central bank had significantly cut the rate from the 21% level recorded during the first half of 2025. It uses the key rate as its primary tool to keep annual inflation close to the 4% target.
The 2027 to 2029 guidelines also feature a separate risk scenario with much higher interest rates and inflation levels. In that case, the average key rate would reach 19% to 21% in 2027, with inflation between 11% and 13%. The proinflation forecast remains distinct from both this 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.