## Forecasts into Action: Japan Partnership 2025

## Source details

**Canonical URL:** [Forecasts into Action: Japan Partnership 2025](https://www.imf.org/-/media/files/capacity-developement/brochures/forecasts-into-action-japan-partnership-2025.pdf)

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- [Markdown version](/-/media/files/capacity-developement/brochures/forecasts-into-action-japan-partnership-2025.pdf.md)
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### Japan–IMF Partnership and Purpose
- Since 1990, Japan has been the first and remains the largest and longest-standing contributor to IMF capacity development (CD) efforts, supporting institution and skill building for sustainable growth and inclusive prosperity through Japan-funded IMF bilateral programs.
- Japan-funded programs typically focus on:
  - Fiscal policy and public financial management
  - Monetary and capital market reforms
  - Macroeconomic statistics
  - Sound macroeconomic management
- A central pillar is the macroeconomic frameworks workstream, which strengthens countries’ macroeconomic foundations and aligns CD with broader policy advice and financial support.
- Japan’s financial support is instrumental in low-income countries and fragile and conflict-affected states.

### Value and Objectives of Macroeconomic Frameworks (ICD)
- The IMF’s Institute for Capacity Development (ICD) strengthens governments’ ability to forecast and analyze policy options by building, adapting, and enabling use of macroeconomic frameworks tailored to country needs.
- Purposes of frameworks:
  - Make better informed decisions
  - Communicate policies more clearly
  - Strengthen institutional resilience
- Macroeconomic frameworks create a shared language between national authorities and IMF teams, enhancing policy dialogue and synergies with technical assistance, surveillance, and lending.

### Evolution and Innovations in ICD Capacity Building (Timeline)
- 1964: IMF Institute established helping countries build core analytical skills in macroeconomic policy and management, including macroeconomic frameworks.
- 1992: Joint Vienna Institute (JVI) launched; today a global network of 17 Regional Capacity Development Centers.
- 2012: IMF Institute renamed Institute for Capacity Development (ICD).
- 2014: Training curriculum overhauled to address financial crises, climate risks, and digital transformation.
- 2016: Customized training introduced enabling on-the-job learning.
- 2024: AI-Powered Learning rolled out to expand access, personalize training, and boost real-world impact.

### Guiding Principles for Effective Impact (ICD)
- Country-led approach: Authorities lead with ICD support.
- Tailored solutions: Frameworks adapted to country contexts and priorities.
- Coaching-based TA: Hands-on coaching during and between missions.
- Embedded in policy: Frameworks integrated into policymaking processes.
- Built to last: Tools documented through manuals and guides to ensure continuity during staff transitions.
- Peer learning: Communities of practice to foster shared learning and long-term partnerships.

### Technical Assistance: Goals, Frameworks, and Tools
- Goals:
  - Developing forecasting & policy analysis systems
  - Macroeconomic forecasting, policy analysis, and communication
  - Public debt sustainability analysis
  - Integrating climate-related risks and macrofinancial linkages into frameworks
- Macroeconomic framework types:
  - Simple Accounting Frameworks
  - Extended Financial Programming & Policies (FPP) macro-frameworks
  - Semi-structural gap models (“QPMs”)
  - Structural (DSGE) simulation models
- Supporting tools:
  - Public debt dynamics tools
  - Nowcasting & Near-term Forecasting Tools
  - Potential output analysis
  - Climate risk & adaptive investment effects

### From Design to Delivery: TA Process Steps
- STEP 1: Country request received — Country Authorities -> IMF HQ / Regional Centers
- STEP 2: Initial review & pre-scoping — IMF HQ + Regional Centers
- STEP 3: Needs assessment & scoping — IMF HQ + Regional Centers
- STEP 4: Co-design workplan — IMF HQ + Regional Centers
- STEP 5: Develop & implement tools — IMF HQ + Regional Centers
- STEP 6: Project completion — Country Authorities + IMF HQ
- STEP 7: Monitoring & evaluation — IMF HQ + Country Authorities

### Country Outcomes and Examples
- Sri Lanka (Ministry of Finance)
  - Customization of the Macroeconomic Framework Tool (MFT) for medium-term forecasting and scenario analysis.
  - MFT enables consistent macro-fiscal forecasts, improved coordination, and evidence-based policymaking through baseline and alternative policy scenarios using national data.
- Zimbabwe (Ministry of Finance, Economic Development, and Investment Promotion)
  - Development of a revamped Macroeconomic Projections Tool (MPT) based on the Comprehensive Adaptive Expectations Model (CAEM).
  - Consolidated shared database, integrated MPT with Public Debt Dynamics Tool (DDT), enabling consistent medium-term projections and simulation of fiscal and monetary policy scenarios.
- Lao PDR (Central Bank)
  - Six tailored FPAS technical assistance missions delivered forecasting and nowcasting tools embedded in policy workflows and used in Monetary Policy Committee deliberations.
  - A Core Group manages tools and the database to ensure consistency and continuity.
- Vietnam (State Bank of Vietnam)
  - Implementation of FPAS with a customized Quarterly Projection Model (QPM) reflecting Vietnam’s economic characteristics and policy framework.
  - QPM provides quantitative inputs for deliberations on output, inflation, and exchange rate stability, embedded in regular workflows.
- Solomon Islands (Central Bank)
  - Modernized monetary policy process with nowcasting, near-term forecasting, and QPM for real-time forecasts and policy scenarios.
  - Introduced a Forecasting Calendar, a Technical Subcommittee reporting to the Monetary Policy Committee, and strengthened external communication with forward-looking policy statements.

### Institutional Capacity and Personnel
- Teams include:
  - HQ staff: Lead analytical and technical work, provide strategic oversight, and engage key stakeholders.
  - Regional advisors: Reside in the field, offering local knowledge and agile responses.
  - Short-term experts: Provide specialized expertise for specific technical issues.

### Key Numeric and Contact Data (as presented)
- 89.56
- 83.45
- 88.22
- 75.33
- 20.15
- 23.43
- 25.33
- 50.77
- 48.89
- 55.93
- Social: @IMFcapdev
- Social: @IMFcapacitydevelopment
- linkedin.com/showcase/IMFcapacitydevelopment
- Institutional contact: INTERNATIONAL MONETARY FUND — IMF.org/capdev

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_Source: https://www.imf.org/-/media/files/capacity-developement/brochures/forecasts-into-action-japan-partnership-2025.pdf_