MOSCOW, February 14. /TASS/. The Bank of Russia, as expected, kept the key rate at 21% per annum at its first meeting in 2025 and will assess raising it at the next meeting, the regulator said in a statement.
"The Bank of Russia Board of Directors decided to keep the key rate at 21.00% per annum. Current inflationary pressures remain high. Domestic demand growth is still outstripping the capabilities to expand the supply of goods and services. Concurrently, the cooling of lending activity has become more pronounced, and households’ propensity to save is increasing," the regulator said.
The Bank of Russia will consider the advisability of raising the key rate at its next meeting, taking into account the speed and sustainability of the decline in inflation. "The baseline scenario provides that returning inflation to the target will require a longer period of maintaining tight monetary conditions in the economy than it was forecast in October," the regulator noted.
At the same time, the Bank of Russia raised its forecast for the average key rate for 2025-2026 - the regulator expects the average key rate within the range of 19-22% by the end of 2025. Thus, the forecast for the average key rate for 2025 has been raised to 19-22% from 17-20%, for 2026 - to 13-14% from 12-13%. For 2027, the Bank of Russia kept the forecast for the average key rate at 7.5-8.5%.
According to the Bank of Russia’s estimates, annual inflation in Russia will decrease to 7-8% in 2025, return to 4% in 2026, and in the coming months inflationary pressure will begin to gradually ease.
"According to the Bank of Russia’s forecast, given the monetary policy stance, annual inflation will decline to 7-8% in 2025, return to 4.0% in 2026 and stay at the target further on," the regulator said.
It was noted that in the base scenario, the Bank of Russia expects that in the coming months inflationary pressure will begin to gradually ease under the influence of cooling lending and high savings activity. At the same time, annual inflation in Russia, according to estimates as of February 10, reached 10.0%.
The regulator raised its forecast for Russian economic growth in 2025 from 0.5-1.5% to 1-2%. At the same time, the regulator lowered its forecast for GDP growth in 2026 from 1-2% to 0.5-1.5%. The forecast for 2027 has been kept at 1.5-2.5%.
Actual GDP growth by the end of 2024 amounted to 4.1%, higher than the regulator's October expectations.
The Bank of Russia lowered its forecast for the price of Brent oil in 2025 to $65 from $80 per barrel, and in 2026 - to $60 from $75 per barrel. The forecast for 2027 has been lowered to $60 from $70 per barrel.
The Russian labor market remains tight, unemployment remains at historical lows, the Bank of Russia said in a statement.
"The labor market remains tight. Unemployment is still at its record lows. Rising wages continue to outpace growth in labor productivity. Nevertheless, according to surveys, companies have become more cautious about hiring employees and increasing their wages. The number of businesses facing labor shortages has been declining. In addition, demand for a labor force in certain industries has been decreasing and a reallocation of employees across industries continues. This creates preconditions for a gradual return of the economy to balanced growth," the regulator said.
At the same time, the regulator has lowered its forecast for the growth of lending to the population for 2025 to 1-6% from 6-11%, the regulator said in a statement.
The Bank of Russia lowered its forecast for the growth of mortgage lending for 2025 to 3-8% from 8-13%. The regulator has kept its forecast for the growth of corporate lending at 8-13%.
The Bank of Russia Board of Directors will hild its next key rate meeting on March 21, 2025.