Key facts
- Russian central bank held key rate at 14% for second time.
- 2026 inflation forecast raised to 7.1%-7.6% from 6%-7%.
- Rates expected to remain near current levels in coming year.
- Inflation target of 4% expected in 2027.
- Petrol prices up 21%, diesel up 13.4% since start of 2026.
- State budget deficit set to reach 3.2% of GDP in 2026.
The Russian central bank maintained its key interest rate at 14% for the second time in less than two months, as elevated inflation pressures, driven by Ukrainian drone attacks on refineries, government spending, and utility fee hikes, persist in the economy. The bank also revised its inflation forecast for 2026 upward to a range of 7.1%-7.6% from 6%-7% previously, indicating that rates are expected to stay near current levels for the coming year. The decision aligned with analyst expectations. Governor Elvira Nabiullina noted that the speed of refinery repairs and secondary effects on inflation expectations introduce uncertainty. The state budget deficit is projected to reach 3.2% of GDP in 2026, with increased military expenses contributing to a 13% rise in spending this year.