Monday, November 2, 2015

Review of old and new forecasts for CPI in Guam

Fairly recently, the Consumer Price Index report from the Bureau of Statistics and Plans has been released. This gives me an opportunity to review my previous simple extrapolative forecasts for third quarter 2015.

Third Quarter 2015
Actual: 116.4
1-year window: 115.4
2-year window: 115.4
3-year window: 116.5
4-year window: 116.7
5-year window: 116.9

As we see, the 1- and 2-year window forecasts were both low, and the 4- and 5-year window forecasts were a bit high, while the 3-year window was pretty close again.  Continuing with roughly the same methodology, here are my forecasts:

Fourth Quarter 2015
1-year window: 116.2
2-year window: 116.5
3-year window: 116.4
4-year window: 116.6
5-year window: 116.8

Looking at these forecasts, the 1-year is forecasting mild deflation (-0.7% annualized inflation), while the highest estimate (the 5-year window) is projecting an annualized inflation rate of 1.4%, which is pretty low. This could indicate continued demand-side weakness.

No comments:

Post a Comment