The Central Bank of Russia has published an updated macroeconomic forecast following its April key rate meeting. The document revises February estimates to reflect the escalation in the Middle East and rising oil prices, painting a bleak picture.
The most notable change is a sharp upward revision of the oil price forecast. For 2026, the central bank raised its benchmark from $45 to $65 per barrel, and for 2027 from $50 to $55. In other words, the external environment for Russia has improved significantly. At the same time, forecasts for GDP and inflation remained unchanged.
The most interesting aspect, however, is the regulator’s reaction to this “improvement.” Instead of easing monetary policy, the central bank raised its projected average interest rate for 2026 by one percentage point, to 14.0–14.5%.
The logic is simple and unforgiving: additional petrodollars, flowing through government spending, fuel domestic demand, which in turn drives inflation. In other words, higher oil revenues mean more money in the economy — and therefore a longer period of expensive borrowing.
This amounts to an admission that Russia remains structurally dependent on commodity market conditions and is unable to break out of this cycle even under favorable circumstances.
Against the backdrop of economic slowdown and a 0.5% GDP decline in the first quarter, the pro-Kremlin “Center for Macroeconomic Analysis and Short-Term Forecasting” issued a memo calling for a revision of the central bank’s mandate. It proposed requiring the regulator to focus not only on inflation, but also on the overall state of the economy. The authors even suggested partially limiting the Bank of Russia’s independence and forcing it to coordinate decisions with the government.
The overall message of the updated forecast is that the Moscow authorities are not expecting a rapid normalization of relations with the West and do not plan to ease monetary pressure. On the contrary, the higher the oil revenues, the greater the risk of inflationary overheating — and the fewer the reasons to cut interest rates.
