The economist assessed the risks of a sharp reduction in the key interest rate in Russia

The regulator's analytical note considers a hypothetical scenario in which inflation is about 6%, and the rate drops sharply to 3% and remains at this level for a long time. In such a model, the economy really gets a powerful boost at the first stage. Denis Astafyev, an entrepreneur, fund manager and founder of the SharesPro fintech platform, told Izvestia on March 12.

According to him, cheap loans stimulate consumer demand and investment, which leads to faster economic growth.

"At the first stage, the economy is really accelerating — GDP growth exceeds 2% per annum. Cheap credit provokes a consumer boom and investment activity, construction and retail receive fuel," the expert noted.

However, as Astafyev explained, such growth turns out to be short-term. The economy is rapidly facing supply-side constraints: the labor market is already operating at almost its limit, unemployment is at historic lows, and staff shortages persist. In such conditions, there is an overheating of the economy. Businesses and the public are beginning to factor rising prices into salaries, contracts, and rents, which creates stable inflationary expectations.

"People and companies stop believing in price stability and start putting growth into economic decisions in advance. This is turning into a self—fulfilling forecast," he explained.

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At the same time, the current dynamics of inflation in Russia is still showing the opposite trend. According to Rosstat, annual inflation slowed to 5.75% at the beginning of March, and the weekly price increase was only 0.08%. At the same time, the Bank of Russia is gradually reducing its key rate from a peak of 21% last fall to the current 15.5%.

According to the expert, in the baseline scenario, the regulator expects inflation to return to the target level of about 4% in the second half of 2026. That is why a sharp acceleration of inflation to double digits looks unlikely.

Astafyev stressed that the Central Bank's analytical note is not a forecast, but rather a warning about risks. An attempt to accelerate the rate cut under political pressure may trigger inflationary processes that will be difficult to stop.

The expert noted that industries dependent on long—term loans, primarily housing construction, the mortgage market and consumer lending, would be particularly sensitive to such a scenario. In the short term, they could benefit from cheap money, but as inflation accelerates, long-term planning becomes almost impossible.

On March 11, the Bank of Russia published a study in which it warned of the serious consequences of a sharp reduction in the key rate to 3%. Artificially stimulating demand will lead to short-term GDP growth, followed by a deep recession. High inflation expectations can lead to inflation of 20% in two years, 40% in three years, and more than 100% in seven years.

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