Workshop on Short-Term Inflation Forecasting (STIF)

BACKGROUND

Price stability is one of the core objectives of modern central banks around the world, including the MEFMI region. Accordingly, predicting the future course of inflation precisely is an important element of achieving this objective, especially in an inflation-targeting environment. Accurate forecasts of future inflation are partly dependent on precise information regarding current inflation, as well as good forecasts of shortterm inflation developments. The short-term inflation forecast (STIF), therefore, can help central banks to understand current price dynamics. It is also useful for cross-checking with other types of macro models that contribute to monetary policy decisions. To maintain price stability effectively, central banks require cross-dimensional skills in data analysis, building relevant macroeconomic tools and generating consistent inflation forecasts. They also require close coordination with data collection agencies and other economic institutions to tell a coherent economic story. MEFMI will, therefore, conduct a workshop on STIF to support member countries in this regard. The workshop will provide policymakers with a good understanding of STIF to support price stability.

OBJECTIVES

The objective of this course is to equip participants with skills to undertake a bottom-up forecast of inflation by projecting components of the CPI basket.

CONTENT

1. Introduction to STIF;

2. Forecasting disaggregated inflation components;

3. Putting together the forecasts; and

4. Other alternative inflation forecasting techniques.

TARGET GROUP

This course targets junior to mid-level officials responsible for inflation forecasting and analysis. The course is also relevant for officials of Ministries of Finance/ Planning and Statistics offices dealing with issues closely related to inflation.