7.5 again: Nabiullina promised to switch to a neutral rate in 2027

Russia will be able to achieve a neutral key rate of 7.5-8.5% in 2027. This forecast was made by the head of the Central Bank, Elvira Nabiullina, presenting at the plenary session of the State Duma a report on the main directions of monetary policy for the next three years. According to the estimates of the chairman of the Bank of Russia, now the mortgage market is gradually coming to life, but attempts to warm up the market with non—targeted preferential programs lead to the opposite effect - they accelerate housing prices. In 2025, concessional loans were issued on average for 120-130 billion per month, which led to an increase in mortgage rates for other citizens. According to the head of the Central Bank, inflation will accelerate slightly at the beginning of next year, but it will reach its target in the second half of 2026. What other topics were discussed during the annual report can be found in the Izvestia article.

Nabiullina commented on the preferential mortgage

The rate in Russia will reach a neutral level only by 2027, said the head of the Central Bank, Elvira Nabiullina, speaking in the State Duma with the annual report on monetary policy.

— We will switch from a tight monetary policy to a neutral one, and we estimate a neutral one when our key rate will be 7.5–8.5%. According to our updated forecast, this will happen in 2027 and the money supply will grow by 8-13% by 2027," Nabiullina said, answering a question from a State Duma deputy.

Next year, the Central Bank only sees room for a reduction in the key rate. According to the head of the regulator, the same market mortgage has already begun to revive. At the same time, preferential programs need to be prioritized and made more targeted to stabilize real estate prices.

— The more concessional the loan, the higher the key rate will be, so that the balance will converge and inflation will not accelerate. But we want, I'm sure we all want loans to be available to everyone – to all citizens, to all businesses, to all regions, and to the federal budget," said the head of the Central Bank.

According to Nabiullina, in 2025, concessional loans were issued to citizens by an average of 120-130 billion per month, and this is a lot — as a result, rates increased for everyone else. Non-targeted mortgage programs lead to a heavy burden on the budget, the head of the Central Bank noted. So far, the average market mortgage rate in Russia is 21.2%.

In the future, the amount of concessional financing is unlikely to grow, independent expert Andrei Barkhota recalled. Yulia Kovalenko, associate professor of the Basic Department of Financial Control, Analysis and Audit of the Main Control Department of the City of Moscow, Plekhanov Russian University of Economics, also talks about reducing the volume of preferential mortgages next year. The reduction in funding for this item is also included in the draft budget for the next three years.

Businesses are also actively taking out preferential loans now. According to the regulator, an alternative to increasing such lending could be for companies to turn to the stock market and attract new investors. In order for the economy to stand firmly on its feet, investments must rely on both credit and the securities market, concluded Elvira Nabiullina.

What will be the inflation rate next year?

It is necessary to treat statements about the recession responsibly, there are no signs of it in the Russian economy, Elvira Nabiullina emphasized. In response to a question from deputy Oksana Dmitrieva about lowering the key rate, the head of the Central Bank said that inflation in the country is slowing down not spontaneously, but under the influence of PREP. Budget policy will also help this next year. At the same time, the head of the Central Bank warned that inflation could accelerate for a short time in early 2026. But this does not negate the vector of lowering the key rate.

"Our inflation expectations have been raised to 4-5%. This revision is caused by temporary pro—inflationary factors, including the situation on the fuel market," said Elvira Nabiullina. Steady inflation will reach 4% in the second half of 2026, she explained.

— Reducing inflation does not contradict the objectives of economic growth and national development goals. Is the economy capable of making a breakthrough if price stability is sacrificed and inflation is allowed to accelerate? Yes, but for a very short period. The economy will not be able to repeat it year after year, but inflation will rise day after day. Such a policy of monetary demand pumping is a guaranteed path directly into stagflation, and in the worst case, into hyperinflation and financial crisis," Elvira Nabiullina said a day earlier, speaking at the Federation Council.

According to her, this is evidenced by the experience of the 90s. Therefore, you need to act carefully and do not forget about the price increase.

Deputy Mikhail Delyagin asked Nabiullina about the excess profits of banks. He also wondered if the Central Bank was going to regulate the turnover of cryptocurrencies. Nabiullina ruled out excessive profitability of banks and noted a decrease in their margins. As far as the crypt is concerned, there are no changes.: It will be used for foreign trade settlements.

In her speech, the head of the Bank of Russia also touched upon the topic of low unemployment, which has already turned into a shortage of personnel. This leads to fierce competition between enterprises for workers and to the fact that wages are growing faster than labor productivity. These factors push up inflation and devalue the same salaries, Nabiullina noted. However, the first signs of a softening in the labor market have now appeared.

—The problem of the shortage of qualified personnel should be solved through the modernization of the education system, state support and the introduction of technologies that can compensate for the shortage of personnel by increasing labor productivity," said Anastasia Rusakova, General Director of the National Association of Internal Auditors and Supervisors, member of the Public Council of the Ministry of Finance of Russia.

The shortage of personnel will slowly go away due to the movement towards a state of equilibrium in the labor market, Andrei Barkhota noted. According to him, staff optimization in medium and large companies will help to increase the supply of labor and reduce its cost. This will help alleviate the problem of staff shortages, he concluded.

How investments in the economy are changing

Investments of enterprises in the economy were also discussed in the State Duma. They have grown by a quarter since 2022, said Elvira Nabiullina.

The growth of investments primarily continues due to the profits of companies and their own funds. This year, in the real sector, it is hovering around 2-2.5 trillion rubles per month, said the chairman of the Bank of Russia.

The head of the Central Bank stressed that the growth rate of investments varies depending on the industry. This year, there has been a decrease in investments in mining, construction and transportation. Meanwhile, industries such as manufacturing, agriculture, and trade continue to grow.

"Investment growth is critically important for the economy, as it allows not only to maintain, but also to generate sustainable GDP growth, which is based not only on government orders, but also on domestic corporate demand and the development of private infrastructure projects," said Dmitry Tselishchev, Managing Director of the investment company Rikom—Trust.

According to him, against the background of a slight decrease in the key interest rate, there is a slight revival of investment activity in industry and the service sector.