MOSCOW, RUSSIA / RankWire.AI / – The Bank of Russia forecasts an average key rate of 13% to 15% in 2027 under a scenario characterized by persistent inflation. This projection is part of its Monetary Policy Guidelines for 2027 to 2029. As of August 31, the central bank maintains its key rate at 14%, based on official data. The scenario assumes domestic demand will remain strong, supply growth will slow down, and inflation pressures will stay more persistent than in the baseline forecast.
Within this proinflationary outlook, annual inflation is expected to be between 4.5% and 5.5% in 2027. The Bank of Russia anticipates inflation will return to its 4% target in 2028. The average key rate is projected to range from 11% to 12% in 2028, then decrease to a forecasted 8.5% to 9.5% in 2029, with inflation remaining at 4%.
The country’s gross domestic product (GDP) is expected to expand by 1% to 2% in 2027 under this scenario. Growth is forecast at 0.5% to 1.5% in 2028 and 1.5% to 2.5% in 2029. For 2026, the central bank projects GDP growth to be between zero and 1%. Inflation for that year is forecast at 6% to 7%, with the average key rate at 14.5% to 14.6%.
Inflation Scenario Maintains Elevated Rates
The proinflation scenario assumes domestic demand will stay stronger than in the central bank’s baseline forecast, with slower supply expansion and tighter production capacity. Other considerations include heightened inflation expectations, increased protectionist policies, and greater fiscal support to boost aggregate demand. Additionally, the Bank of Russia considers increased sanctions pressure, which could limit access to technology and hinder productivity and overall production capacity.
The forecast of a 13% to 15% average key rate for 2027 exceeds the baseline range. In the baseline scenario, the Bank of Russia estimates an average rate of 10.5% to 12.5% for the following year. It also expects inflation to return to 4% in 2027. The disinflationary scenario predicts an average key rate of 9% to 11% for 2027, with inflation ranging from 3% to 4%.
The Key Rate Currently Stands at 14%
In late July, the Bank of Russia lowered its key rate to 14%, after holding it at 14.25%. Official daily figures show that the 14% rate remained in effect through August 31. This rate cut followed a significant reduction from the 21% level recorded during the first half of 2025. The main tool for implementing its monetary policy framework is the key rate, which is used to keep annual inflation close to the 4% target.
The 2027 to 2029 guidelines also include a separate risk scenario with substantially higher interest rates and inflation. That scenario projects an average key rate of 19% to 21% in 2027 and annual inflation of 11% to 13%. The proinflation forecast remains distinct from both the baseline outlook and that risk case. These projections are part of the Bank of Russia’s medium-term framework for inflation, economic growth, and monetary policy.