The Bank of Russia cut its key interest rate by 50 basis points to 14.5% at the board of directors meeting on April 24, the eighth consecutive rate cut in the central bank's monetary easing cycle, Rosstat data shows.

Domestic demand had approached the capacity for expansion of goods and services supply, while sustained price growth indicators had not yet eased, standing at 4% to 5% on an annual basis, the central bank said in its release. Significant uncertainty remained on external conditions and fiscal policy parameters.

The appropriateness of further rate cuts at upcoming meetings will depend on the sustainability of inflation slowdown, the dynamics of inflation expectations and risk assessments from external and internal conditions.

The Bank of Russia forecasts annual inflation will fall to between 4.5% and 5.5% in 2026, with sustained inflation stabilising near 4% in the second half of the year. In 2027 and beyond, annual inflation will be at the target level.

According to Rosstat, inflation ran at 0.01% in the week of April 14 to 20, following 0% in the previous week. Price growth from the start of April to April 20 was 0.18%, with year-to-date inflation at 3.16%.

Household inflation expectations fell in April to 12.9% from 13.4% the month before. Expectations among respondents with savings fell more sharply to 11.4% from 12.3%. Expectations among respondents without savings, traditionally higher, also fell to 14.3% from 14.4%.

Economic activity showed mixed signals. The Business Climate Index rose to 2.2 points in April from minus 0.1 points in March, while current business assessments reached 10.2 points, up 0.8 points on the month. Business expectations for the next three months reached 10 points in April against 8.8 points in March.

Russian Economic Development Minister Maxim Reshetnikov said at the Serbia-Russia Business Forum in Belgrade on April 23 that the task of reducing inflation in Russia had largely been solved and that the slowdown in 2026 was an absolutely sustainable trend.

Tax changes including the increase in the base VAT rate from 20% to 22% had a limited effect on inflation, Bank of Russia Governor Elvira Nabiullina told the State Duma on March 25 during the presentation of the regulator's annual report. The contribution from tax changes was just over 1 percentage point, Nabiullina said.