❕The Bank of Russia lowered the key rate to 14% and updated its economic outlook:

▪Russia's annual inflation stood at 5.9% as of July 20

▪Annual inflation in Russia is expected to remain at the target level in 2027 and beyond

▪The Bank of Russia lowered its 2026 GDP growth forecast for Russia to 0-1%, while leaving its 2027-2028 forecast unchanged

▪A more gradual reduction in the key rate is needed than previously expected

▪The Bank of Russia lowered its 2026 forecast for the tax benchmark oil price from $65 to $60 per barrel

▪Russia's economy grew at a moderate pace in the Q2 of 2026, with consumer demand making the largest contribution to growth

▪Credit activity slowed down in June, mainly due to trends in corporate lending

▪The Bank of Russia left its 2026 mortgage lending growth forecast unchanged at 6-10%

▪Tightness in the labor market is gradually easing, while wage growth has slowed down

▪The Bank of Russia lowered its 2027 household lending growth forecast to 5-10%

▪The regulator raised its forecast for the average key rate through the end of 2026 to 14.5-14.6% from 14-14.5%

▪The Bank of Russia revised upward its forecast for the average key rate in 2027 to 10.5-12.5% from 8-10%

▪The Bank of Russia expects Russia's GDP to grow by 1.5-2.5% in 2029