Cash Flow Forecasting

Economic risk profile

1. Demographic characteristics

(a) Level and growth of population

(b) Age distribution

(c) Urbanization trends

2. Structure of the economy

(a) Extent and quality of infrastructure

(i) Transportation and communications

(ii) Utilities

(iii) Housing

(iv) Education

(v) Health services

(b) Natural resource endowment

(i) Agriculture, forestry, fishing

(ii) Non-energy minerals

(iii) Energy resources

(c) Distribution of productive activities

(i) Agriculture and livestock

(1) Land tenure system

(2) Degree of mechanization

(3) Principal crops

(4) Markets

(ii) Forestry and fishing

(iii) Mining

(iv) Construction

(1) Residential

(2) Non-residential

(v) Manufacturing

(1) Concentration and size of manufacturers

(2) Product types (i.e. consumer, intermediate and capital

goods)

(3) Markets

(vi) Services-financial/non-financial, public/private

(d) Public sector participation in productive activities

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3. Recent economic trends

(a) Composition and growth of aggregate demand (nominal and real

terms)

(i) Consumption

(1) Private sector

(2) Public sector

(ii) Investment

(1) Private sector

(2) Public sector

(iii) External savings (i.e. exports/imports)

(b) Domestic economy

(i) Total production (i.e.: GDP)

(ii) Production by sector

(1) Agriculture, forestry and fishing

(2) Mining

(3) Construction

(4) Manufacturing

(5) Utilities

(6) Services

(iii) Price movements and major determinants

(1) External factors

(2) Wages

(3) Public sector deficit financing

(4) Private sector credit expansion

(5) Supply bottlenecks

(iv) Employment trends

(1) Level of growth of employment and labour force

(2) Labour participation rates

(3) Unemployment rate and structure

(4) Sectorial trends

(5) Regional trends

(6) Composition of employment: public vs. private

(c) External sector

(i) Current account balance

(1) Export growth and composition

(a) Agricultural commodities

(b) Minerals

(c) Manufactured goods

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(2) Destination of exports (i.e. markets)

(3) Price and income elasticity of exports

(4) Import growth and composition

(a) Food

(b) Other consumer goods

(c) Energy

(d) Other intermediate goods

(e) Capital goods

(5) Price and income elasticity of imports

(6) Geographic origin of imports

(7) Terms of trade

(8) Services account

(a) Interest payments and receipts

(b) Transportation

(c) Other

(9) Transfers

(ii) Capital account balance

(1) Direct investment

(2) Long-term capital flows

(a) Private sector

(b) Public sector

(3) Short-term capital flows

(4) Access to capital markets

(a) Types of instruments used

(b) Types of borrowers and lenders

(iii) International reserves

(1) Level

(2) Composition (i.e.: gold, foreign exchange)

(3) Secondary reserves

(iv) External debt

(1) Amount outstanding

(2) Composition by borrower

(a) Central government

(b) Other public sector

(c) Publicly guaranteed

(d) Private

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(3) Composition by lender

(a) Bilateral

(b) Multilateral

(c) Private financial institutions

(d) Suppliers’ credits

(4) Maturity structure

(5) Currency composition

(6) Growth rate

(7) Comparison with export earnings and GDP

(8) Debt service payments

(a) Amortization

(b) Interest

(c) Comparison with export earnings

(d) Future debt service schedule

4. Economic policy

(a) Price and wage policies

(i) Wage settlement process

(1) Trade union activity

(2) Management groups

(3) Role and influence of government

(ii) Degree of wage indexation

(iii) Productivity trends

(iv) Non-wage benefits and unemployment insurance

(v) Direct price controls

(1) Public sector tariffs

(2) Private sector pricing

(vi) Price subsidies (agricultural, industrial, etc.)

(b) Monetary policy

(i) Level of development of financial system

(1) Types of financial institutions

(2) Types of financial instruments

(3) Role of government in credit allocation

(4) Foreign participation

(ii) Trends for monetary aggregates

(1) Money supply growth targets and actual experience

(2) Domestic credit expansion

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(a) Public sector

(b) Private sector

(3) Velocity (national income/money supply)

(4) Changes in international reserves

(iii) Monetary policy instruments

(1) Reserve requirements

(2) Open market operations

(3) Credit controls

(4) Interest rate regulations

(5) Ability to sterilize international reserve flows

(6) Controls on foreign borrowing and

(7) Rediscount facilities

(c) Fiscal policy

(i) Structure of the public sector

(1) Central government

(2) Social security system

(3) State agencies and enterprises

(4) Regional and local governments

(ii) Budgetary process

(1) Executive branch

(2) Legislative branch

(3) Major constituencies (business, labour, etc.)

(iii) Revenues

(1) Composition

(a) Direct taxes-personal income, corporate income,

property, others

(b) Indirect taxes-valued added, sales, export & import

duties, others

(c) Service charges and public sector tariffs

(2) Income elasticity of revenues

(3) Distribution of tax burden by income groups

(4) Overall tax burden (% of GDP)

(5) Tax collection and evasion

(6) Tax incentives (i.e. investment, export, employment)

(iv) Expenditures

(1) Current expenditures

(a) Distribution by expenditure category

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