Larisa Pavlova: "The main reason for lowering the key rate is the significant slowdown in price growth"

      15 September 2025 18:27

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       Economy. Member of the Board of Directors of the Bank of Russia and head of the Volga-Vyatka Main Directorate of the Bank of Russia, Larisa Pavlova, commented on the decision on the key rate on September 12, 2025.

      "On September 12 the Bank of Russia lowered the key rate by another one percentage point – from 18% to 17%. The main reason was a significant slowdown in price growth. And although one-off factors helped with this, in particular a larger drop in prices for vegetables and fruits in August, underlying inflation also fell noticeably thanks to the Bank of Russia's high-rate policy. Now we need to consolidate the downward movement of inflation so that next year it returns to the 4% target and remains low thereafter.

      In addition, we see that the Russian economy is growing, although overall activity has declined. The situation across industries is uneven. Thus, in sectors oriented to external demand, business activity has slowed sharply. At the same time, increases in citizens' incomes and budgetary spending support domestic demand. As a result, consumer activity has even increased slightly. Investment is also continuing to grow, but more slowly than in the record 2023–2024 years. Unemployment remains at a historic low, but the number of companies experiencing staff shortages has decreased.

      Our further decisions on the rate will depend on how sustainably inflation slows and on inflation expectations."

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