Statement by Bank of Russia Governor Elvira Nabiullina in follow-up to Board of Directors meeting on 13 February 2026

Good afternoon. Today, we have made the decision to cut the key rate to 15.5% per annum.

The economic situation has been developing generally in line with our baseline scenario. Price growth was rather high in January, according to weekly data, but nonetheless, this does not change the overall picture. We consider that this is a redistribution of inflation between late 2025 and early 2026. Therefore, it would be correct to analyse the statistics for the last three months in total, rather than in isolation – I will speak on this issue in detail later. The accumulated effect of tight monetary policy creates prerequisites for returning inflation to its 4% target. Thus, we have continued monetary policy easing.

I would now dwell on the reasons behind our today’s decision.

Firstly, inflation.

We will receive full data for January tonight, but as is evident from weekly statistics, prices rose notably over the month.

The main reason was the expected pass-through of increased VAT to prices. However, its effect has turned out to be stronger and more concentrated in January, as compared to a similar tax rise in 2019. Most companies had decided not to pass on higher VAT to prices last year, but did this in early 2026, which is why this factor had the strongest effect in January.

The second factor is price dynamics in certain volatile categories. At the end of last year, fruit and vegetable price growth was atypically low, while in January, it accelerated significantly, primarily due to weather conditions, which pushed up greenhouse facilities’ heating costs. Moreover, because of increased excise duties, prices for petrol, tobacco products, and alcoholic beverages were rising faster as well at the beginning of the year.

For some experts, January weekly figures were a negative surprise, which they perceived as evidence of a persistent inflation acceleration. Nevertheless, according to our assessment, the slowdown at the end of the year and the acceleration in early 2026 were both transitory, with inflation being virtually carried over from 2025 to January 2026.

Currently, annual inflation equals 6.3%, which is slightly below our forecast range of 6.5–7.0% that we expected for the beginning of the year. Thus, the dynamics of inflation are generally in line with our baseline scenario: inflation has approached the same point through its slowdown in November–December 2025 and its subsequent acceleration in January 2026, rather than gradually. This redistribution was the reason for lower inflation as of the end of last year. Taking this into account, we have raised the inflation forecast for 2026 to 4.5–5.5%.

The question is whether the effect of the VAT increase has already faded or not. We would be able to give an unambiguous answer only after we receive data for the first quarter. So far, we can see that price growth peaked over the first two weeks of January, waning in the second half of the month. I would like to reiterate that this estimate is based on incomplete weekly data. Additionally, I would like to note that full monthly data for January will show an acceleration in some measures of underlying inflation, for example, core inflation. Why? Because it is impossible to strip out all the effects of increased VAT from these measures of underlying inflation. Therefore, the acceleration should not be interpreted as an upward reversal in underlying inflation.

As for the risks to inflation stemming from second-round effects of the tax measures on inflation, these risks have not risen so far. This is evident from the dynamics of inflation expectations. In January, households’ expectations remained unchanged, while companies’ price expectations declined considerably in February after their surge in January and even returned to the levels of last October. Overall, our baseline scenario still assumes that underlying inflation will be around 4% in the second half of the year.

Secondly, the economy.

Full-year economic growth in 2025 was 1%, which is the upper bound of our forecast. These dynamics are generally in line with our expectations: the growth rate of economic activity has become more moderate.

At the end of 2025, consumer demand expectedly picked up, which was due to the anticipated increases in the recycling fee and VAT. Consumers were seeking to make expensive purchases earlier, before prices rise. Accordingly, we expect the situation to reverse at the beginning of 2026, that is, consumer activity will moderate. These expectations are justified by, among other things, the high-frequency data of the Bank of Russia’s monitoring of businesses for January and February.

As regards investments, companies were expanding them at a record pace over the past three years, which translated into new projects that are now at commissioning stage. They will support the growth of the economy’s potential, even though investment dynamics are becoming more moderate. Their heterogeneity across industries remains high. Specifically, sectors related to exports and transportation expect investments to decline from the high levels of previous years. Nonetheless, there are also industries planning to increase investments. We have revised our 2026 investment forecast slightly downwards, but still expect positive dynamics.

The gradual slowdown in economic activity is accompanied by labour market easing. Unemployment stays at its record lows. However, the percentage of companies referring to staff shortages as their main constraint has notably contracted and is currently at the minimum level over the past two years. Furthermore, companies’ wage indexation plans are now more modest than last year. All these are signs that the pressure put by the labour market on businesses’ costs has been weakening.

Our GDP growth forecast in the baseline scenario has remained unchanged. The key trends in the economy have generally stayed the same.

Thirdly, monetary conditions.

Briefly, they have continued to ease, while remaining tight. Although yields on federal government bonds and money market rates have edged up, real interest rates have stayed almost unchanged taking into account the rise in market participants’ inflation expectations. Loan and deposit rates have been declining in both nominal and real terms.

Corporate lending was expanding moderately in December 2025–January 2026, after the elevated growth rates observed in the autumn months. This was associated with the seasonal dynamics of budget spending. At the end of the year, companies usually receive payments under the fulfilled government contracts, while the beginning of the year is the time of advance payments under new contracts. During these periods, certain enterprises’ need for market loans temporarily decreases, although this is a normal seasonal effect.

Contrastingly, retail lending accelerated slightly, predominantly driven by mortgages. The rise in the demand for housing mortgage loans was triggered by the expected tightening of the subsidised programme terms. However, this was frontloaded demand, and accordingly, it may adjust downwards further on.

Households’ saving activity remains high, while the structure of savings has been changing slightly. In addition to deposits, households’ interest in other forms of savings, primarily financial market instruments, is increasing. This trend is quite natural at the stage of monetary policy easing. I would like to note that savings in the economy should be analysed in total, taking into account both deposits and other instruments. Overall, the saving ratio stays high, and the shifts in saving’s structure do not change this fact.

Overall, the accumulated effect of tight monetary conditions creates prerequisites for inflation to slow down to 4%.

Briefly about external conditions.

Trade disputes and global market fragmentation have not had a considerable impact on the current situation so far, although their effects might still manifest themselves in the future. The world economy has continued to expand at a rather sustainable pace overall, supporting the demand for a wide range of commodities.

The situation in the crude oil market is different. Last year, oil supply was soaring, which has created a surplus in the global market and is now exerting pressure on prices. The situation for Russian exporters is complicated by sanctions. In view of the global market trends, we have reduced our forecast of oil prices for the next three years. Accordingly, we have also adjusted the forecast of the value of Russian exports.

The ruble exchange rate has remained stable. Although oil producers faced a decline in their export earnings, this was partially offset by earnings from other exports. The ruble remains attractive overall, which is and will be supported by the fiscal rule and sound monetary policy.

I will now speak of risks.

The balance of risks remains shifted towards proinflationary ones.

The main proinflationary risks are still associated with a longer-lasting deviation of the Russian economy upwards from its balanced growth path and elevated inflation expectations. In January, households’ expectations did not respond to increased VAT. However, we cannot rule out the possibility of these effects in the upcoming months.

Crude oil prices also involve serious risks. If oil prices do not rebound from their current levels to those assumed in our baseline scenario, this might accelerate inflation through the exchange rate channel.

Proinflationary risks stemming from the labour market have somewhat weakened, according to our assessment.

As always, we put a particular focus on fiscal policy – both federal and regional policies. The parameters of fiscal policy enshrined in the law suggest its strong disinflationary effect this year. However, the situation might develop differently and deviate from the forecast, for example in terms of non-oil and gas revenues. If the non-oil and gas deficit increases, we may have less room for cutting the key rate.

Disinflationary risks remain as well, the key one of which is a more considerable slowdown in domestic demand growth. 

Winding up, I would like to comment on our future decisions.

At the upcoming meetings, we will assess the need for a further key rate cut. The baseline scenario assumes that the key rate will average 13.5–14.5% in 2026. Our updated forecast suggests that, next year, the key rate should be maintained at a slightly higher level of 8–9% for inflation to return to the target sustainably. This is needed because inflation expectations have been persistently heightened. Over the past four years, when proinflationary shocks have been preventing inflation from declining to the target, inflation expectations have become persistently elevated. They will be decreasing rather slowly, including due to significant indexations of the administered services and tariffs in the next few years.

Taking into account all these factors, other things being equal, we should reduce the key rate more smoothly. This will make it possible to bring underlying inflation back to 4% and return the economy to a balanced growth path in the second half of the year.

Thank you for your attention.