1. REVIEW OF MACROECONOMIC FORECASTS AND GOVERNMENT POLICY
TOOLS AND APPROACHES USED BY PBO KENYA

2. ECONOMIC ANALYSIS
Tools and Approaches used by PBO Kenya to verify government’s:
Economic outlook including fiscal risks
Adherence to fiscal rules
Ability to achieve targets (inflation, exchange rate etc)

3. ECONOMIC OUTLOOK: TOOLS and APPROACHES
PBOM Model for Economic Forecasting and Policy Analysis
Empirical structural macroeconomic model based on time series data from KNBS, CBK, National Treasury or expert knowledge
Can be used for budget forecasts as well as reviewing policy scenarios
Model automatically produces output tables including real GDP growth, inflation, employment growth, effects on governments revenues, expenditures and deficit, the Balance of Payments, government debt etc

4. ECONOMIC OUTLOOK: TOOLS and APPROACHES
Complementary to Macro Model is a Poverty module which translates macroeconomic developments into changes in number of households below the poverty line

5. ECONOMIC OUTLOOK: TOOLS and APPROACHES
Macroeconomic Diagnostics
Analyze potential output and calculate output gaps, identify expenditure composition of growth, measure inflation, and assess sources of inflation
Assess monetary policy and fiscal policy stance
Analyze public and external debt sustainability, analyze the external position
Assess medium–term prospects of the economy including the sustainability of public and external debt, and identify impediments to long–term growth

6. ECONOMIC OUTLOOK: TOOLS and APPROACHES
Preparation of Budget Options
Document provides alternative macro framework, resources available, expenditure priorities
Review of Budget Policy Statement
Preparation of Analytical brief – assess underlying risks to key macro variables based on expert opinion and past performance; realism of revenue forecasts and deficit targets

7. ADHERENCE TO FISCAL RULES: TOOLS and APPROACHES
There are existing rules limiting external debt; regional rule limiting fiscal deficit
PBOs review expenditure plans and any indicative possibility of flouting these rules based on realism of entire macro fiscal framework

8. OTHER DOCUMENTS: TOOLS and APPROACHES
Monthly Bulletins
Half Year Economic and Fiscal Update
Quarterly briefs
Continuous interrogation – keeping track of what is happening helps determine if we are on track

9. Q &A