Technical Assistance Reports

Rwanda: Technical Assistance Report-Further Strengthening the Nowcasting Framework at the National Bank of Rwanda

January 17, 2025

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International Monetary Fund. Monetary and Capital Markets Department "Rwanda: Technical Assistance Report-Further Strengthening the Nowcasting Framework at the National Bank of Rwanda", Technical Assistance Reports 2025, 006 (2025), accessed April 15, 2025, https://doi.org/10.5089/9798400297335.019

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Summary

At the request of the National Bank of Rwanda (NBR), a technical assistance (TA) mission from the Monetary and Capital Markets (MCM) department was conducted from October 9 to 18, 2023, to enhance the NBR’s Forecasting and Policy Analysis System (FPAS). The mission aimed to strengthen the understanding and application of nowcasting frameworks for Gross Domestic Product (GDP) and Consumer Price Index (CPI) inflation, as well as to analyze the effects of weather shocks on food crop production and fresh food prices. The mission included interactive technical sessions with NBR staff and achieved the following: (1) Improved forecast evaluation by resolving discrepancies in the use of different Core CPI definitions in the medium-term Quarterly Projection Model (QPM) and nowcasting models; (2) Established a system for analyzing the impact of weather shocks, particularly rainfall, on food crop production and fresh food prices; (3) Provided hands-on training for NBR staff on using CPI nowcasting tools to monitor monthly inflation outcomes and creating and interpreting uncertainty fan charts for GDP and CPI projections; and (4) Enhanced understanding of the construction of high-frequency real sector indicators in GDP nowcasting models.

Subject: Consumer price indexes, Economic forecasting, Food prices, Food production, Inflation, Prices, Production

Keywords: AFRITAC East, Central Banking, Climate Risks, Consumer price indexes, Crop production, Economic Forecasting and Analysis, Food prices, Food production, IMF Monetary, IMF's Monetary, Inflation, Monetary Policy, Nowcasting, Nowcasting framework, Rwanda.

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