The Bank of Russia cut its benchmark interest rate by 50bps to 16% on December 19, 2025, in line with market expectations, reflecting progress in disinflation amid a gradual return of the economy to a more balanced growth path. Recent data show a slowdown in current and underlying price growth, with seasonally adjusted inflation easing notably in October–November, while annual inflation is expected to fall below 6% by year-end. However, inflation expectations have edged higher and remain a key concern, alongside still-robust lending activity and uneven price dynamics driven by volatile items such as fuel and food. The central bank stressed that monetary policy will remain tight for a prolonged period to ensure inflation returns sustainably to target. Inflation is forecast to decline to 4–5% in 2026, with underlying inflation reaching 4% in H2. Economic growth continues at a moderate but uneven pace, supported by domestic demand, while labour market tightness is easing only gradually.
