Munich Personal RePEc Archive

Predicting inflation in Senegal: An ARMA approach

NYONI, THABANI (2019): Predicting inflation in Senegal: An ARMA approach.

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Abstract

This research uses annual time series data on inflation rates in Senegal from 1968 to 2017, to model and forecast inflation using ARMA models. Diagnostic tests indicate that the inflation rate series is I(0). The study presents the ARMA (1, 0, 0) model, which is equivalent to an AR (1) model. The diagnostic tests further imply that the presented optimal ARMA (1, 0, 0) model is stable and acceptable for forecasting inflation rates in Senegal. The results of the study apparently show that inflation will be approximately 4.7% by 2020. Policy makers and the business community in Senegal are expected to take advantage of the anticipated stable inflation rates over the next decade.

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