The Central Bank of Russia foresees the base rate decreasing to a yearly average of 13% to 14% in 2026 and 7.5% to 8.5% in 2027. These projections were outlined in the regulator’s comment to the medium-term forecast, published on May 12, following a board meeting on the base rate held on April 25, 2025.
In late April, the Bank of Russia kept the base rate at 21%. This record-high rate, set in October 2024, hasn’t changed since then. As the regulator noted, inflationary pressure is gradually easing, although it remains significant. Domestic demand still outpaces the prospects for expanding the supply of goods and services by a wide margin.
This year, the Central Bank expects the annual average base rate to range from 19.5% to 21.5%. The regulator emphasized that in order to bring inflation down to the desired target by 2026, it will maintain monetary conditions as tight as necessary, indicating a prolonged period of restrictive policy. Further decisions regarding the base rate will be made based on the pace and persistence of inflation’s decline, as well as inflation expectations.
The Bank of Russia forecasts that between 2025 and 2026, the global economy’s growth pace will slow down, with oil prices falling by $5 per barrel below February’s projections for this year. The gross domestic product (GDP) growth forecast remains unchanged at 1% to 2% for 2025 and at 0.5% to 1.5% for 2026. In 2027, the Russian economy’s growth is expected to return to a growth rate of 1.5% to 2.5% per annum. The annual inflation this year is expected to be 7% to 8%, with a subsequent decline to 4% next year. It would remain around this value thereafter if the current monetary policy persists.
