{
  "title": "Fiscal Forecast Errors in East Africa: Nature, Drivers, and Policy Implications",
  "publication": "IMF Working Papers, March 27, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997",
  "overlayPath": "/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/index.md",
  "summary": "This paper explores the nature and underlying factors contributing to fiscal slippages in selected East African countries from 2000 to 2024. Slippages are proxied by the budget forecast errors as captured in WEO projections by IMF Staff.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Study period: 2000 to 2024.\n- Geographic focus: selected East African countries.\n- Slippage proxy: budget forecast errors as captured in WEO projections by IMF Staff.\n- Authors: Youssouf Kiendrebeogo, Barima K Gyesaw.\n- Publication date: March 27, 2026.\n- Publication: IMF Working Papers, Working Paper No. 2026/055.\n- Pages: 34.\n- DOI: https://doi.org/10.5089/9781484308332.001\n- ISBN: 9781484308332\n- ISSN: 1018-5941\n- Stock No: WPIEA2026055"
    },
    {
      "heading": "Key findings",
      "content": "- Budget forecasts tend to be systematically optimistic, with actual budget balances typically falling short of projected balances.\n- Primary sources of slippage:\n  - Spending overruns (primary driver).\n  - Revenue shortfalls (secondary driver).\n- Composition of unexpected revenue shortfalls:\n  - Largely arise from indirect taxes (VAT and customs).\n- Composition of spending slippages:\n  - Predominantly influenced by public investment, goods and services, and social protection expenditures.\n- Contexts with stronger optimism bias:\n  - When the budget is in deficit.\n  - During economic booms.\n  - Among commodity-exporting countries.\n  - In the absence of an IMF program.\n  - In the absence of fiscal rules.\n  - When fiscal institutions are weak."
    },
    {
      "heading": "Analytical robustness",
      "content": "- Results are robust to:\n  - Excluding potential outliers.\n  - Expanding the sample to other SSA countries.\n  - Controlling for country specific effects.\n  - Controlling for potential endogeneity bias."
    },
    {
      "heading": "Policy implications (as implied by findings)",
      "content": "- Fiscal rules and stronger fiscal institutions are associated with reduced optimism bias in budget forecasts.\n- Engagement with an IMF program is associated with less pronounced optimism bias.\n- Addressing vulnerabilities in indirect tax revenue forecasting (VAT and customs) and managing public investment, goods and services, and social protection spending can reduce budget forecast slippages.\n- Monitoring and mitigation efforts are particularly important during economic booms, for commodity-exporting countries, and when budgets are in deficit.\n\nSource: Fiscal Forecast Errors in East Africa: Nature, Drivers, and Policy Implications, Youssouf Kiendrebeogo and Barima K Gyesaw, IMF Working Papers 2026, 055 (2026), March 27, 2026.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/bundle-manifest.json)",
    "Authors: Youssouf Kiendrebeogo, Barima K Gyesaw",
    "Published: March 27, 2026",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484308332.001",
    "Study period: 2000 to 2024.",
    "Geographic focus: selected East African countries.",
    "Slippage proxy: budget forecast errors as captured in WEO projections by IMF Staff.",
    "Authors: Youssouf Kiendrebeogo, Barima K Gyesaw.",
    "Publication date: March 27, 2026.",
    "Publication: IMF Working Papers, Working Paper No. 2026/055.",
    "Pages: 34.",
    "DOI: https://doi.org/10.5089/9781484308332.001",
    "ISBN: 9781484308332",
    "ISSN: 1018-5941",
    "Stock No: WPIEA2026055",
    "Budget forecasts tend to be systematically optimistic, with actual budget balances typically falling short of projected balances.",
    "Primary sources of slippage:",
    "Composition of unexpected revenue shortfalls:",
    "Composition of spending slippages:",
    "Contexts with stronger optimism bias:",
    "Results are robust to:",
    "Fiscal rules and stronger fiscal institutions are associated with reduced optimism bias in budget forecasts.",
    "Engagement with an IMF program is associated with less pronounced optimism bias.",
    "Addressing vulnerabilities in indirect tax revenue forecasting (VAT and customs) and managing public investment, goods and services, and social protection spending can reduce budget forecast slippages.",
    "Monitoring and mitigation efforts are particularly important during economic booms, for commodity-exporting countries, and when budgets are in deficit.",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2026/english/wpiea2026055-source-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2026/english/wpiea2026055-source-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2026/english/wpiea2026055-source-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/index.md",
    "json": "/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/index.json",
    "bundleManifest": "/en/publications/wp/issues/2026/03/27/fiscal-forecast-errors-in-east-africa-nature-drivers-and-policy-implications-574997/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T03:10:17.441Z"
}