Keywords

inflation, forecasting, ARIMA

Inflation forecasting is an essential component of the Monetary Policy Projection, and there are constant efforts to improve it at the Croatian National Bank. One step is to improve the model of short-term forecasting of the consumer price index with seasonal ARIMA processes, where, along with direct forecasting of the total consumer price index, the attempt is made to forecast changes in the index's components in order to obtain a more detailed insight into the sources of future inflationary or deflationary pressures and to determine whether a forecast of developments in the total consumer price index obtained by aggregating forecasted values of the index's components is more precise than a direct forecast.