Kenya: Technical Assistance Report-Improving the Business Surveys and the Nowcasting Framework at the Central Bank of Kenya
Technical Assistance Reports, August 7, 2024
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- Kenya: Technical Assistance Report-Improving the Business Surveys and the Nowcasting Framework at the Central Bank of Kenya
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Bibliographic details
- Published: August 7, 2024
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798400285394.019
Mission overview and objectives
- TA mission from the Monetary and Capital Markets (MCM) department visited Nairobi, Kenya, from April 17–21, 2023.
- Main objectives:
- Improve the Central Bank of Kenya (CBK)’s Forecasting and Policy Analysis System (FPAS).
- Improve CBK’s business surveys.
- Strengthen the nowcasting framework for GDP and CPI inflation.
Technical work and tools developed
- Interactive technical sessions were held with CBK staff to provide detailed recommendations on survey design and integration into policy processes.
- Software and methodological outputs:
- EViews programs for efficient survey data management.
- Conversion of qualitative survey data to quantitative data using the Balance of Opinion approach.
- Fixes and enhancements to the EViews-based nowcasting platform.
- Tools for automated model evaluation.
Findings on CBK business surveys
- Key observations:
- Survey design and timing can be better aligned to inform nowcasts and projections.
- Lack of a firm registry limits ability to track respondents and ensure sample representativeness.
- Survey data pipelines and historical consolidation are not fully automated or consolidated into time series.
Recommendations — business surveys
- Streamline survey questions and timing to better inform nowcasts and projections.
- Create a firm registry to track survey respondents and ensure sample representativeness.
- Automate the survey data pipeline and consolidate historical results into a time series.
Findings on the nowcasting framework
- The existing nowcasting platform required fixes and enhancements to support reliable real-time forecasting for GDP and CPI inflation.
- There is scope to better incorporate survey-derived quantitative indicators and to evaluate models systematically.
Recommendations — nowcasting framework
- Integrate quantified survey results into nowcasting models.
- Continue refining the nowcasting framework at a disaggregated level.
- Expand the database of leading indicators and assess new models using the forecast evaluation framework.
Publication metadata and identifiers
- Publication date: August 7, 2024
- Mission dates: April 17–21, 2023
- Pages: 72
- Series: Technical Assistance Report No. 2024/065
- Issue: 065
- DOI: https://doi.org/10.5089/9798400285394.019
- ISBN: 9798400285394
- ISSN: 3005-4575
International Monetary Fund. Monetary and Capital Markets Department "Kenya: Technical Assistance Report-Improving the Business Surveys and the Nowcasting Framework at the Central Bank of Kenya", Technical Assistance Reports 2024, 065 (2024).
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