Research-Thesis: Forecasting Inflation Rate In Cameroon: A Time Series Approach

Abstract

This study aims to predict inflation in Cameroon, with specific objectives to examine the trend of inflation in Cameroon and develop a model to forecast the inflation rate in the country. The study employs a time series approach using the ARIMAX model to analyse and forecast inflation in Cameroon. The model performance is evaluated using metrics such as RMSE and MAE. The study’s findings indicate a significant trend in the movement of inflation in Cameroon, with an upward trend over time. However, the annual inflation rate has been trending downwards, dropping to 4.5% in 2024 from 7.4% in 2023. The ARIMAX mode is found to be effective in forecasting inflation, capturing the underlying patterns in the data and providing accurate forecasts. The study provides strong evidence of a significant trend in inflation in Cameroon and highlights the importance of accurate inflation forecasting for informed decision-making. The ARIMA models performances suggests that it can be a useful tool for policymakers and businesses in Cameroon. The study’s findings have significant implications for economic policy and decision making in Cameroon and provide a useful framework for further research on inflation forecasting in developing countries.