Technical Notes and Manuals

This User Manual discusses the operational aspects of the Macroframework Foundations Tool (MFT), a multi-sector macroeconomic framework for forecasting and policy analysis developed by the IMF Institute for Capacity Development (ICD). MFT 1.0 is the basic version of the MFT while the tool is being further developed to incorporate more features. The structure of the MFT is based on the standard four-sector framework of the Financial Programming and Policies (FPP) developed and used by IMF staff, but it is simplified by adopting greater sectoral aggregation and requiring less data. Different from the standard accounting-based FPP framework, the MFT uses behavioral equations for generating projections and incorporates explicit feedback loops between variables across sectors. The MFT is a simple but powerful tool to produce consistent macroeconomic projections from accounting and economic perspectives, and it could be extended to incorporate a longer projection horizon, greater sectoral details, and different policy environment. The MFT is not a ready-to-use tool because it needs to be built and customized to a specific country, and this User Manual and the accompanying Excel template could guide that process.