The Federal Democratic Republic of Ethiopia: Technical Assistance Report-Forecasting Policy Assessment System (FPAS) Scoping Mission

The Technical Assistance (TA) mission, conducted in Addis Ababa, Ethiopia, from November 4 to 8, 2024, assisted the National Bank of Ethiopia’s (NBE) authorities in developing a Forecasting and Policy Analysis System (FPAS). The aim of the mission was to assess the status of the FPAS and identify developmental needs considering the ongoing transition to an interest rate-based framework. This TA mission reviewed the status of key components of FPAS at the NBE, revealing that both forecasting models and a dedicated forecasting team are in place. The commitment of the Governor, Vice Governor, management, and staff to enhance the NBE's FPAS is promising for the seamless implementation of efficient FPAS, which will include the introduction of additional nowcasting and satellite models, development of a structural macro model, and establishment of a structured monetary policy and forecasting process.