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Forecasting Inflation Rate Using the ARIMA Model: Zambia’s Perspective from 2023 to 2043

Author

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  • Julius Zulu

    (The Bed-Rock Research Consultancy, Department of Research Services, Lusaka, Zambia)

  • Gardner Mwansa

    (Walter Sisulu University, Department of Information Technology, South Africa)

  • Kenny Changwe

    (Kabamba Secondary School, Serenje, Zambia)

Abstract

The study sought to forecast Zambia’s inflation rate from 2023 to 2043 using the Autoregressive Integrated Moving Average Model (ARIMA). Using the Box–Jenkins modeling method, the study utilized 37 yearly time series data from 1986 to 2022 to forecast the next 20 years by using ARIMA Model. The ARIMA (4, 1, 2) model was used as being the one with the most significant parameters, the least log likelihood, Sigma, and the least Akaike and Bayesian information criteria. The ARIMA (4, 1, 2) model was also used due to its accuracy, mathematical soundness, and flexibility, thanks to the inclusion of AR and MA terms over a regression analysis. The results show that the value of the Zambia’s inflation rate is predicted to rise by 47.27% in 20 years.

Suggested Citation

  • Julius Zulu & Gardner Mwansa & Kenny Changwe, 2024. "Forecasting Inflation Rate Using the ARIMA Model: Zambia’s Perspective from 2023 to 2043," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(12), pages 698-713, December.
    • Handle: RePEc:bjc:journl:v:11:y:2024:i:12:p:698-713
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    References listed on IDEAS

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    1. Hyndman, Rob J. & Koehler, Anne B., 2006. "Another look at measures of forecast accuracy," International Journal of Forecasting, Elsevier, vol. 22(4), pages 679-688.
    2. Phiri, Andrew, 2013. "Inflation and Economic Growth in Zambia: A Threshold Autoregressive (TAR) Econometric Approach," MPRA Paper 52093, University Library of Munich, Germany.
    3. repec:aer:wpaper:484 is not listed on IDEAS
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