Munich Personal RePEc Archive

ARIMA modeling and forecasting of Consumer Price Index (CPI) in Germany

NYONI, THABANI (2019): ARIMA modeling and forecasting of Consumer Price Index (CPI) in Germany.

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Abstract

This paper uses annual time series data on CPI in Germany from 1960 to 2017, to model and forecast CPI using the Box – Jenkins ARIMA technique. Diagnostic tests indicate that the GC series is I (1). The study presents the ARIMA (1, 1, 1) model for predicting CPI in Germany. The diagnostic tests further show that the presented parsimonious model is stable and acceptable for predicting CPI in Germany. The results of the study apparently show that CPI in Germany is likely to continue on an upwards trajectory in the next decade. The study encourages policy makers to make use of tight monetary and fiscal policy measures in order to deal with inflation in Germany.

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