## 1blrea2020002 - Preface

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---

### Executive summary and mission purpose
- Mission: the fifth of the IMF short-term technical assistance (TA) missions to help the National Bank of the Republic of Belarus (NBRB) enhance modeling, forecasting and policy analysis capacity, and the forecasting and policy analysis system (FPAS).
- Mission dates and location: visited Minsk during February 28–March 7, 2018.
- Main aim: simulate initial conditions and compile a QPM-based forecast scenario as part of a practical forecasting round at the NBRB in March 2018, and deepen the modeling team’s understanding of the QPM’s role in policy decision making and internal communication.
- TA project scope: a planned two-year IMF TA and training project to assist the NBRB in implementing its Road Map for Transitioning to Inflation Targeting (IT), by strengthening analytical toolkits and integrating them into decision making.

### Key contextual findings
- NBRB strategy: reforming its monetary policy framework along a three-stage strategy toward eventual adoption of inflation targeting (IT).
- Operational changes: interest-rate-based monetary framework launched in January 2018; operational target shifted to the overnight interbank rate.
- Internal inflation goal for 2018: 5.5 percent (overall year-on-year inflation for December 2018), consistent with the official year-end inflation target of “no more than 6 percent” in the 2018 Monetary Policy Guidelines.
- Road Map last-stage requirements include:
  - strengthening monetary policy transmission channels;
  - changes to legal and governance framework to ensure institutional and operational independence and public announcement of medium-term inflation targets;
  - development of a robust methodology for forecasting inflation and reforms to internal monetary policy communication and decision making;
  - development of financial institutions and markets;
  - enhancement of the information policy.

### Progress on FPAS and QPM integration
- Calendar and meetings:
  - The Board approved a calendar of regular policy meetings for the year, constituting a framework for regular forecasting rounds (planned four times in 2018).
  - Within each forecast round there are three meetings with the Board about: initial conditions, first version of forecast scenario, and final version of forecast scenario.
- Implementation:
  - The first official QPM-based forecast round started in February 2018; initial conditions were presented and discussed with the Board in February 2018.
  - Estimations of some key variables (output gap, real interest rate gap, etc.) have been newly included in the public report "Key trends in Monetary Policy."
- Capacity building:
  - The QPM team has boosted capacity to operate the QPM and run policy-relevant model-based analyses and forecast simulations, including remote collaboration with TA experts and participation in a modeling workshop at the Czech National Bank.
  - The mission provided a second one-week customized training in February 2018 focusing on forecasting processes, generating and interpreting alternative scenarios, and internal communication with the Board.

### Main mission activities (hands-on)
- Daily hands-on learning-by-doing sessions with the QPM team to:
  - re-simulate initial conditions;
  - generate baseline and alternative forecast scenarios;
  - compile a model-based forecast scenario for March 2018.
- Tasks covered:
  - re-simulating initial conditions;
  - generating baseline and alternative forecast scenarios;
  - imposing expert judgments and interpreting results;
  - elaborating risks and uncertainties around scenarios;
  - guidance on compiling a model macroeconomic story and presenting model-based outcomes;
  - debriefings from the December 2017 Board monetary policy meeting and review of presentations to the Board in February 2018;
  - discussion of near-term inflation nowcasting and forecasting (noted as an area of obvious progress).
- QPM structure and calibration reviewed and amended, including:
  - money block: impact of forex depreciation on money supply;
  - core inflation: very limited direct effect of changes in oil prices to core inflation;
  - dollarization: influence of forex depreciation on dollarization;
  - wage block: re-specification of real wage equilibrium.
- Discussed structure of meetings during forecasting rounds and the transition to using the interest rate instrument beginning of 2018; reviewed transition primarily from the model framework.

### Identified gaps and challenges
- Fiscal policy analyses remain insufficiently covered within the FPAS despite fiscal policy being an important element of the Belarusian macroeconomic situation.
- Some QPM blocks may require further adjustment in future forecasting rounds as new information arrives or as the QPM team gains practical operating experience.
- Additional TA missions and training are needed to further develop forecast procedures and support the NBRB staff through the learning curve.

### Key recommendations and implementation timing
- Establish a formal forecasting team (FT) with its head and ensure its effective operating.
  - Timing: Short Term
  - Comment: Preferably before the next forecasting round.
- Expand the modeling team by at least 2 experts (and provide the team with regular and constructive feedback on their forecasting work).
  - Timing: Medium Term
  - Comment: New members of the team can participate in follow-up TA missions.
- Consider a schedule for the next forecasting round compiled by staff considering the length of the forecasting round and regular data update during the forecasting round.
  - Timing: Short Term
  - Comment: Prior to the next TA mission.
- Improve NTF techniques, especially fiscal analyses and forecasting.
  - Timing: Medium Term
- Remote work of the team with TA experts focusing on updates of:
  - data and NTF nowcast,
  - IC and forecast scenario,
  - forecast scenario presentation.
  - Timing: Short Term
  - Comment: Do the updating not only by management request but regularly.
- Boost forecasting and policy analyzing capacity by:
  - reviewing the QPM and its presentation to NBRB’s experts and management,
  - extending the portfolio of available models for NTF and sectoral projections.
  - Timing: Medium Term

### Institutional commitment and next steps
- Authorities will support continuation of the project and continue using the QPM-based FPAS to support policy decision making.
- Deputy Chairman of the Board expressed continuing support and advocated for improving NBRB communication: first build efficient internal communication within the FPAS, then establish an external communication.
- Follow-up activities and potential training demands were assessed and agreed with the modeling team to be undertaken before a follow-up TA mission in the second quarter of 2018.

### Forecasting team composition and responsibilities
- Establish a formal forecasting team (FT) within the Monetary Policy and Economic Analysis Directorate (MPEAD).
- FT should encompass:
  - the current QPM team,
  - sectoral experts from the Forecasting Department,
  - representatives from other departments of the MPEAD,
  - experts on external development,
  - experts on communication,
  - a head of the FT.
- Current status:
  - Experts with responsibilities have started to form the FT.
  - The head of the FT (responsible for managing team activities and bearing responsibility for timely delivery of team work outcomes) is still missing.
- Between forecast rounds, each team member works on its own agenda; the FT meets regularly during forecast rounds according to a schedule.

### Model operations, staffing, and personal substitutability
- Managerial consideration required for risks and benefits of personal substitutability in the model-based FPAS.
- Current QPM core team: consists of three experts, which is considered the minimum number enabling to operate the model.
- Recommendation: expand the modeling team by at least two economists (model operators) to enable coverage of all important aspects of the forecasting process with desirable depth and scope.

### Structure and sequence of regular meetings during a forecast round
- Meetings should follow a sequential order to ensure vertical flow of information from FT up to the Board.
- Recommended meetings, timing, purpose, audience, and outcome:
  - Forecasting techniques — Week 1
    - Purpose: Present changes in the QPM and other forecasting tools (technical meeting).
    - Audience: FT, management.
    - Outcome: Approval of changes and amendments of the QPM and other forecasting tools.
  - Issue meeting 1 — Week 1
    - Purpose: Discuss issues important for the Board in the forecast round.
    - Audience: FT, management.
    - Outcome: A list of issues to be analyzed in the forecast round.
  - Near-term forecast (NTF) — Week 2
    - Purpose: Discuss nowcast, NTF and views of sectoral experts.
    - Audience: FT, management.
    - Outcome: Consensual views on current macroeconomic developments.
  - Initial conditions (IC) — Week 2
    - Purpose: Present, discuss and get feedback on the IC prepared for the meeting with the Board.
    - Audience: FT, management.
    - Outcome: Management feedback on initial conditions.
  - Initial conditions meeting with the Board — Week 3
    - Purpose: Present and discuss the IC with the Board and get a Board’s feedback.
    - Audience: FT, management, Board.
    - Outcome: The Board view and feedback on the initial conditions.
  - First version of the forecast — Week 3
    - Purpose: Present the first version of a forecast.
    - Audience: FT, management.
    - Outcome: Consensual view on the forecast.
  - Meeting on the first version of the forecast with the Board — Week 4
    - Purpose: Present and discuss the first version of the forecast; collect demand for alternative scenarios from the Board.
    - Audience: FT, management, Board.
    - Outcome: Board’s view on the forecast and a list of alternative scenarios.
  - Final forecast — Week 4
    - Purpose: Present and discuss the final forecast.
    - Audience: FT, management.
    - Outcome: Approval of the forecast by the management.
  - Meeting on the final forecast with the Board — Week 5 or 6
    - Purpose: Present the final version of the forecast.
    - Audience: management, Board.
    - Outcome: Monetary policy decision.
  - Post mortem — Week 5 or 6
    - Purpose: Identify issues during the forecast round.
    - Audience: FT, management.
    - Outcome: Improvements of forecasting processes for the next round.
- Notes and data updates:
  - FT should take and save notes about main comments, issues and suggested solutions to ensure smooth continuation between forecasting rounds.
  - Extend meeting schedule by data releases of main macroeconomic variables to track data updates and incorporation timing.
- Meetings with the Board are highlighted in red in the original schedule.

### Forecast round timing, cut-off, and data-update rules
- Forecasting round duration guidance:
  - The forecasting round should be as short as possible, but not threatening delivery of high quality analyses and projections.
  - Based on Table 2, the forecasting round should not exceed six weeks to prevent continuous updates of projections by new information, while ensuring all simulation results are up-to-date.
- Possible shortening methods:
  - Provide the Board with materials only a couple of days in advance.
  - Present the first version of the forecast to the Board without complete financial programming calculations.
  - Provide the QPM team with nowcasts and near-term forecasts simultaneously at one time.
- Cut-off date for data update:
  - The final version of the forecast should include all relevant information and newly available data that emerge during the forecast round.
  - Set a cut-off date of data update for the projection reflecting other deadlines and data availability; the deadline should be as close to the Board meeting on the final version of the forecast as possible.
  - If new information is not incorporated into the final version, the Board should be briefed about it, including possible implications.
  - To avoid big changes between forecast versions, perform data updates gradually after every data release.

### Nowcast, sectoral experts, and fiscal policy inputs
- Nowcast and first quarter of model-based projection:
  - Should be re-taken from the NTF tools and sectoral experts; sectoral experts should provide NTF covering all required areas.
- Fiscal policy improvements required:
  - Deeper analysis of fiscal policy and quantification of a fiscal impulse are required as exogenous factors entering the QPM-based projections.
  - Fiscal impulse should include:
    - not only the overall volume of lending provided by the government (in line with the official government program including its various modalities),
    - but also all credits under the subsidized interest rates provided indirectly through other financial institutions (for example through the Development Bank).
  - Analyses and outlooks for government sector wages might significantly improve the performance of the wage block of the QPM.
  - A comprehensive analysis will enable inclusion of the impact of fiscal policy into the model framework in a more precise way in the future.

### Follow-up TA mission scheduling and objectives
- Timing:
  - Next forecasting round is planned to finish in mid-June; a follow-up TA mission should take place in late-May to support the QPM team and enhance communication.
  - Because the first meeting with the Board of the forecast round is scheduled on May 23, the follow-up mission would be planned for the second half of May ideally.
  - The TA mission will focus on assisting the QPM team at the beginning of the forecasting round.
- Main focuses:
  - generating a fully-fledged forecast,
  - organization of the whole forecasting round,
  - interpretation and presentation of the results to the management and the Board of the NBRB,
  - internal communication in general.
- Interim remote support:
  - Modeling team is advised to continue working with the TA experts remotely in the meantime; especially before the monetary policy meeting on March 14 and for updating the forecast scenario.
  - Continuous improvement of modeling capacities and cementing the already gained knowledge is highly desirable.
- Work objectives after this TA mission and prior to the one scheduled for the second quarter 2018:
  - Update the current version of the forecast scenario for the monetary policy Board meeting to ensure the delivered forecast is up-to-date including all available information relevant for policy decision.
  - Keep the forecast scenario updated before the follow-up mission in May: re-run the model for the forecast scenarios, compare the outcomes, discuss possible differences and identify potential problems related to the new observations.
  - Review the structure of the QPM and calibrated parameters: recapitulate all the model adjustments, extensions and recalibration and discuss any unclearness within the team and with the external expert and/or the management.
  - Prepare a schedule of meetings during the next forecasting round following the structure of meetings outlined in Table 2, containing clear deadlines and responsibilities.
  - Update the outlooks of all exogenous variables: prepare outlooks (including interpretation of their dynamics and assumptions used) prior to generating a new forecast, even if based only on experts’ views and opinions; follow-up mission will provide an official presentation and may review processes and tools used for these outlooks and advise adjustments and improvements.
  - Review presentations used during the first forecasting round in 2018: find possible improvements and update the presentations.
- Recalibration guidance:
  - The modeling team is not recommended to recalibrate the model independently, but to identify possible problems and prepare possible solutions to be discussed and implemented with assistance of TA experts either remotely or during the follow-up mission.
  - Recalibration requires experience and checks of consequences for model specification and behavior; some problems may be solved by expert judgment implementations.

*Source: Preface and Executive Summary of the TA mission report (February 28–March 7, 2018) to the National Bank of the Republic of Belarus.*

### Preface ................................................................................................................

### 1blrea2020002 - Preface

### Executive summary and mission purpose
- The mission was the fifth of the IMF short-term technical assistance (TA) missions to help the National Bank of the Republic of Belarus (NBRB) enhance modeling, forecasting and policy analysis capacity, and the forecasting and policy analysis system (FPAS). The mission visited Minsk during February 28–March 7, 2018.
- The mission’s main aim: simulate initial conditions and compile a QPM-based forecast scenario as part of a practical forecasting round at the NBRB in March 2018, and deepen the modeling team’s understanding of the QPM’s role in policy decision making and internal communication.
- The TA project is a planned two-year IMF TA and training project to assist the NBRB in implementing its Road Map for Transitioning to Inflation Targeting (IT), by strengthening analytical toolkits and integrating them into decision making.

### Key contextual findings
- The NBRB is reforming its monetary policy framework along a three-stage strategy toward eventual adoption of inflation targeting (IT).
- The interest-rate-based monetary framework was launched in January 2018; the operational target shifted to the overnight interbank rate.
- The NBRB internal inflation goal for 2018: 5.5 percent (overall year-on-year inflation for December 2018), consistent with the official year-end inflation target of “no more than 6 percent” in the 2018 Monetary Policy Guidelines.
- The Road Map’s last stage requires, inter alia:
  - strengthening monetary policy transmission channels;
  - changes to legal and governance framework to ensure institutional and operational independence and public announcement of medium-term inflation targets;
  - development of a robust methodology for forecasting inflation and reforms to internal monetary policy communication and decision making;
  - development of financial institutions and markets;
  - enhancement of the information policy.

### Progress on FPAS and QPM integration
- The Board approved a calendar of regular policy meetings for the year, constituting a framework for regular forecasting rounds (planned four times in 2018).
- Within each forecast round there are three meetings with the Board about: initial conditions, first version of forecast scenario, and final version of forecast scenario.
- The first official QPM-based forecast round started in February 2018; initial conditions were presented and discussed with the Board in February 2018.
- Estimations of some key variables (output gap, real interest rate gap, etc.) have been newly included in the public report "Key trends in Monetary Policy."
- The QPM team has boosted capacity to operate the QPM and run policy-relevant model-based analyses and forecast simulations, including remote collaboration with TA experts and participation in a modeling workshop at the Czech National Bank.
- The mission provided a second one-week customized training in February 2018 focusing on forecasting processes, generating and interpreting alternative scenarios, and internal communication with the Board.

### Main mission activities (hands-on)
- Daily, hands-on learning-by-doing sessions with the QPM team to re-simulate initial conditions, generate forecast and alternative scenarios, and compile a model-based forecast scenario for March 2018.
- Tasks covered:
  - re-simulating initial conditions;
  - generating baseline and alternative forecast scenarios;
  - imposing expert judgments and interpreting results;
  - elaborating risks and uncertainties around scenarios;
  - guidance on compiling a model macroeconomic story and presenting model-based outcomes;
  - debriefings from the December 2017 Board monetary policy meeting and review of presentations to the Board in February 2018;
  - discussion of near-term inflation nowcasting and forecasting (noted as an area of obvious progress).
- Reviewed and amended QPM structure and calibration, including:
  - money block: impact of forex depreciation on money supply;
  - core inflation: very limited direct effect of changes in oil prices to core inflation;
  - dollarization: influence of forex depreciation on dollarization;
  - wage block: re-specification of real wage equilibrium.
- Discussed structure of meetings during forecasting rounds and the transition to using the interest rate instrument beginning of 2018; reviewed transition primarily from the model framework.

### Identified gaps and challenges
- Fiscal policy analyses remain insufficiently covered within the FPAS despite fiscal policy being an important element of the Belarusian macroeconomic situation.
- Some QPM blocks may require further adjustment in future forecasting rounds as new information arrives or as the QPM team gains practical operating experience.
- Additional TA missions and training are needed to further develop forecast procedures and support the NBRB staff through the learning curve.

### Key recommendations and implementation timing (from Table 1)
- Establishing a formal forecasting team (FT) with its head and ensuring its effective operating.
  - Timing: Short Term
  - Comment: Preferably before the next forecasting round.
- Expanding the modeling team by at least 2 experts (and providing the team with regular and constructive feedback on their forecasting work).
  - Timing: Medium Term
  - Comment: New members of the team can participate in follow-up TA missions.
- Considering a schedule for the next forecasting round (based on Table 2) compiled by the staff considering:
  - The length of the forecasting round,
  - Regular data update during the forecasting round.
  - Timing: Short Term
  - Comment: Prior to the next TA mission.
- Improving NTF techniques, especially fiscal analyses and forecasting.
  - Timing: Medium Term
- Remote work of the team with TA experts focusing on any new issues and the update of:
  - data and NTF nowcast,
  - IC and forecast scenario,
  - forecast scenario presentation.
  - Timing: Short Term
  - Comment: Do the updating not only by management request but regularly.
- Boosting forecasting and policy analyzing capacity by:
  - reviewing the QPM and its presentation to NBRB’s experts and management,
  - extending the portfolio of available models for NTF and sectoral projections.
  - Timing: Medium Term

### Institutional commitment and next steps
- Given progress and mission outcomes, the authorities will support continuation of the project and continue using the QPM-based FPAS to support policy decision making.
- The Deputy Chairman of the Board expressed continuing support for the project and advocated for improving NBRB communication: first to build efficient internal communication within the FPAS, then to establish an external communication.
- Follow-up activities and potential training demands were assessed and agreed with the modeling team to be undertaken before a follow-up TA mission in the second quarter of 2018.

*Source: Preface and Executive Summary of the TA mission report (February 28–March 7, 2018) to the National Bank of the Republic of Belarus.*

### 14. As already recommended by the previous TA mission, a formal forecasting team

### 14. As already recommended by the previous TA mission, a formal forecasting team

### Forecasting team composition and responsibilities
- Establish a formal forecasting team (FT) within the Monetary Policy and Economic Analysis Directorate (MPEAD).
- The FT should encompass:
  - the current QPM team,
  - sectoral experts from the Forecasting Department,
  - representatives from other departments of the MPEAD,
  - experts on external development,
  - experts on communication,
  - a head of the FT.
- Current status:
  - Experts with responsibilities have started to form the FT.
  - The head of the FT (responsible for managing team activities and bearing responsibility for timely delivery of team work outcomes) is still missing.
- Between forecast rounds, each team member works on its own agenda; the FT meets regularly during forecast rounds according to a schedule.

### Model operations, staffing, and personal substitutability
- The model-based FPAS requires careful managerial consideration of risks and benefits of personal substitutability.
- Current QPM core team:
  - consists of three experts, which is considered the minimum number enabling to operate the model.
- Recommendation:
  - NBRB’s management should expand the modeling team by at least two economists (model operators) to enable the team to cover all important aspects of the forecasting process with the desirable depths and scope.

### Structure and sequence of regular meetings during a forecast round (Table 2)
- Meetings are to follow a sequential order and ensure vertical flow of information from FT up to the Board, providing crucial feedback.
- Recommended meetings, week, purpose, audience, and outcome:
  - Forecasting techniques — Week 1
    - Purpose: Present changes in the QPM and other forecasting tools (technical meeting).
    - Audience: FT, management.
    - Outcome: Approval of changes and amendments of the QPM and other forecasting tools.
  - Issue meeting 1 — Week 1
    - Purpose: Discuss issues which might be important for the Board in the forecast round.
    - Audience: FT, management.
    - Outcome: A list of issues to be analyzed in the forecast round.
  - Near-term forecast (NTF) — Week 2
    - Purpose: Discuss nowcast, NTF and views of sectoral experts.
    - Audience: FT, management.
    - Outcome: Consensual views on current macroeconomic developments.
  - Initial conditions (IC) — Week 2
    - Purpose: Present, discuss and get feedback on the IC prepared for the meeting with the Board.
    - Audience: FT, management.
    - Outcome: Management feedback on initial conditions.
  - Initial conditions meeting with the Board — Week 3
    - Purpose: Present and discuss the IC with the Board and get a Board’s feedback.
    - Audience: FT, management, Board.
    - Outcome: The Board view and feedback on the initial conditions.
  - First version of the forecast — Week 3
    - Purpose: Present the first version of a forecast.
    - Audience: FT, management.
    - Outcome: Consensual view on the forecast.
  - Meeting on the first version of the forecast with the Board — Week 4
    - Purpose: Present and discuss the first version of the forecast; collect demand for alternative scenarios from the Board.
    - Audience: FT, management, Board.
    - Outcome: Board’s view on the forecast and a list of alternative scenarios.
  - Final forecast — Week 4
    - Purpose: Present and discuss the final forecast.
    - Audience: FT, management.
    - Outcome: Approval of the forecast by the management.
  - Meeting on the final forecast with the Board — Week 5 or 6
    - Purpose: Present the final version of the forecast.
    - Audience: management, Board.
    - Outcome: Monetary policy decision.
  - Post mortem — Week 5 or 6
    - Purpose: Identify issues during the forecast round.
    - Audience: FT, management.
    - Outcome: Improvements of forecasting processes for the next round.
- Note: Meetings with the Board are highlighted in red.
- Recommendation: FT should take and save notes about main comments, issues and suggested solutions to ensure smooth continuation between forecasting rounds.
- Recommendation: Extend meeting schedule by data releases of main macroeconomic variables to track data updates and incorporation timing.

### Forecast round timing, cut-off, and data-update rules
- Forecasting round duration:
  - The forecasting round should be as short as possible, but not threatening delivery of high quality analyses and projections.
  - Based on Table 2, the forecasting round should not exceed six weeks to prevent continuous updates of projections by new information, while ensuring all simulation results are up-to-date.
- Possible shortening methods:
  - Provide the Board with materials only a couple of days in advance.
  - Present the first version of the forecast to the Board without complete financial programming calculations.
  - Provide the QPM team with nowcasts and near-term forecasts simultaneously at one time.
- Cut-off date for data update:
  - The final version of the forecast should include all relevant information and newly available data that emerge during the forecast round.
  - Set a cut-off date of data update for the projection reflecting other deadlines and data availability; the deadline should be as close to the Board meeting on the final version of the forecast as possible.
  - If new information is not incorporated into the final version, the Board should be briefed about it, including possible implications.
  - To avoid big changes between forecast versions, perform data updates gradually after every data release.

### Nowcast, sectoral experts, and fiscal policy inputs
- Nowcast and first quarter of model-based projection:
  - Should be re-taken from the NTF tools and sectoral experts; sectoral experts should provide NTF covering all required areas.
- Fiscal policy area:
  - Offers scope for improvement in particular.
  - To properly assess fiscal stance and over the forecast horizon, a deeper analysis of fiscal policy and quantification of a fiscal impulse are required as exogenous factors entering the QPM-based projections.
  - The fiscal impulse should include:
    - not only the overall volume of lending provided by the government (in line with the official government program including its various modalities),
    - but also all credits under the subsidized interest rates provided indirectly through other financial institutions (for example through the Development Bank).
  - Analyses and outlooks for government sector wages might significantly improve the performance of the wage block of the QPM.
  - A comprehensive analysis will enable inclusion of the impact of fiscal policy into the model framework in a more precise way in the future.

### Follow-up TA mission scheduling and objectives
- Timing:
  - Next forecasting round is planned to finish in mid-June; a follow-up TA mission should take place in late-May to support the QPM team and enhance communication.
  - Because the first meeting with the Board of the forecast round is scheduled on May 23, the follow-up mission would be planned for the second half of May ideally.
  - The TA mission will focus on assisting the QPM team at the beginning of the forecasting round.
- Main concentrates:
  - generating a fully-fledged forecast,
  - organization of the whole forecasting round,
  - interpretation and presentation of the results to the management and the Board of the NBRB,
  - internal communication in general.
- Interim remote support:
  - Modeling team is advised to continue working with the TA experts remotely in the meantime; especially before the monetary policy meeting on March 14 and for updating the forecast scenario.
  - Continuous improvement of modeling capacities and cementing the already gained knowledge is highly desirable.
- Work objectives after this TA mission and prior to the one scheduled for the second quarter 2018:
  - Update the current version of the forecast scenario for the monetary policy Board meeting to ensure the delivered forecast is up-to-date including all available information relevant for policy decision.
  - Keep the forecast scenario updated before the follow-up mission in May: re-run the model for the forecast scenarios, compare the outcomes, discuss possible differences and identify potential problems related to the new observations.
  - Review the structure of the QPM and calibrated parameters: recapitulate all the model adjustments, extensions and recalibration and discuss any unclearness within the team and with the external expert and/or the management.
  - Prepare a schedule of meetings during the next forecasting round following the structure of meetings outlined in Table 2, containing clear deadlines and responsibilities.
  - Update the outlooks of all exogenous variables: prepare outlooks (including interpretation of their dynamics and assumptions used) prior to generating a new forecast, even if based only on experts’ views and opinions; follow-up mission will provide an official presentation and may review processes and tools used for these outlooks and advise adjustments and improvements.
  - Review presentations used during the first forecasting round in 2018: find possible improvements and update the presentations.
- Recalibration guidance:
  - The modeling team is not recommended to recalibrate the model independently, but to identify possible problems and prepare possible solutions to be discussed and implemented with assistance of TA experts either remotely or during the follow-up mission.
  - Recalibration requires experience and checks of consequences for model specification and behavior; some problems may be solved by expert judgment implementations.

*1blrea2020002 - 14. As already recommended by the previous TA mission, a formal forecasting team*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1blrea2020002.pdf_