The official forecast of the Russian Central Bank already paints a significantly more cautious picture for the country's economy. The regulator lowered its expectations for gross domestic product (GDP) growth in 2026 to barely 0-1%, down from a previous forecast of 0.5-1.5%. At the same time, it is warned that despite the reduction in the base interest rate, it may start to rise again by the end of the year.
At its last meeting, the Central Bank reduced the base interest rate from 25 basis points to 14%. However, this move hides a certain paradox - the regulator itself already expects the average interest rate to reach 14.5-14.6% by the end of the year, and to remain between 10.5 and 12.5% in 2027.
This means that the institution does not see the conditions for a permanent tightening of monetary policy despite the symbolic reduction.
Basics risks
Among the main risks, the Central Bank highlights the rise in inflation due to fuel prices. According to the official explanation, this is the result of a temporary reduction in production capacity at some Russian refineries following Ukrainian attacks.
Since the beginning of the year, gasoline and diesel prices have risen by about 18%, and annual inflation as of July 20 reached 5.9%, already exceeding the target range of regulator.
At the same time, the bank itself warns that if production capacity is not restored by the end of the year, further restrained domestic spending and a more restrictive monetary policy will be required. The regulator already expects annual inflation to reach 6-7% in 2026, and the return to the target level to be only in 2027.
Πo-cautious tone is also evident in the other forecasts. The central bank lowered the expected price of oil used for tax purposes from $65 to $60 per barrel in 2026, and for the following years it is already betting on a price of $50. At the same time, forecasts for the growth of credit to both households and businesses were reduced.