An Attempt to Use ARIMA Models to Forecast Inflation Rates in Algeria

Abstract

The aim of this study is to attempt to forecast monthly inflation rates in Algeria for the period (February 2025 – January 2027), through the analysis of monthly time-series data on inflation rates in Algeria extending from January 2010 to January 2025, and to determine whether ARIMA models can be relied upon to forecast inflation rates in Algeria in the short term. By applying the Box-Jenkins methodology, the results of this study showed that these models can be relied upon to forecast the inflationary phenomenon in Algeria in the short term, and that the appropriate model among the candidate models is the ARIMA(6,1,5) model, after it passed all statistical tests and its validity for short-term forecasting was confirmed.