<\/p>\n
The initiative follows a request by the Ministry of Finance of Ethiopia in October 2024 for support in upgrading its macroeconomic forecasting framework. The project is being implemented by the IMF Regional Technical Assistance Centre for East Africa and the Institute for Capacity Development, with financial support from the Government of Japan.<\/p>\n
<\/p>\n
The programme comes at a critical time for Ethiopia as authorities pursue wide-ranging economic reforms, including financial sector liberalisation, a transition towards an interest-based monetary policy framework and a move to a more flexible exchange rate regime. The IMF said existing forecasting tools need to evolve to better reflect these policy changes and provide stronger support for policymaking.<\/p>\n
<\/p>\n
An IMF scoping mission visited the Ministry of Finance between May 12 and 15, 2025, to assess current forecasting practices and economic modelling capacity. The mission found that Ethiopia has access to extensive economic data, including gross domestic product statistics, consumer price data, balance of payments information, monetary accounts and fiscal accounts.<\/p>\n
<\/p>\n
However, the IMF identified several areas requiring improvement. These include drawing clearer distinctions between policy targets and economic projections, ensuring forecasting models better reflect Ethiopia’s evolving policy framework and placing greater emphasis on economic theory and scenario analysis when evaluating policy choices.<\/p>\n
<\/p>\n
The IMF also highlighted the need to make greater use of high-frequency indicators to support short-term forecasts and provide more timely assessments of economic developments.<\/p>\n
<\/p>\n
As part of the programme, a team of 14 economists from the Ministry of Finance, Ministry of Planning and Development and National Bank of Ethiopia has been assigned to help develop and implement the enhanced forecasting framework.<\/p>\n
<\/p>\n
The IMF plans to replace the current forecasting approach with a customised Comprehensive Adaptive Expectations Model tailored to Ethiopia’s economic structure. The framework will be used to generate baseline forecasts, assess the impact of policy decisions and evaluate economic risks, including the effect of shocks on public debt.<\/p>\n
<\/p>\n
The project is expected to run until September 2026 and will also incorporate nowcasting tools and a Debt Dynamics Tool to strengthen fiscal sustainability and debt management analysis.<\/p>\n
<\/p>\n
The IMF said the upgraded framework should improve the depth, consistency and reliability of economic forecasts, while strengthening coordination among institutions responsible for economic policymaking.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":43929,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-43928","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Ethiopia is set to modernise the way it forecasts and manages its economy under a new International Monetary Fund (IMF) technical assistance programme designed to strengthen economic planning, fiscal management and policy analysis.","published_date":"","news_description":"Ethiopia is set to modernise the way it forecasts and manages its economy under a new International Monetary Fund (IMF) technical assistance programme designed to strengthen economic planning, fiscal management and policy analysis.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/43928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/43928\/revisions"}],"predecessor-version":[{"id":43930,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/43928\/revisions\/43930"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/43929"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=43928"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=43928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}