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Forecasting time series project:All the instructions are given in the image attached. The pdf file is the sample of the project. Keep in mind that it’s just a sample. Follow the template and all other instructions given in the image. I need 100% accuracy in the assignment. Plagiarism should be less than 7%.P.S: My country is Saudi Arabia. So, choose the case study accordingly. Thanks.
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Submission date: 08-Dec-2021 05:41PM (UTC+0300)
Submission ID: 1724411616
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Word count: 546
Character count: 2896
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Stat27l Project
Saudi GDP and Inflation
Stat 271 Project Assignment
I) Introduction
This paper analyzes the relationship between the Gross Domestic Product of Saudi Arabia
and Saudi 1nflation and the effect of GDP on inflation. Historically, the Saudi economic
growth has been accompanied by an increase in the price level of goods and services, there
are a lot of scenarios that can lead GDP and inflation to have either a positive or a negative
relation and this paper will examine what is the current relation between GDP and inflation
and whether GDP is a reliable indicator of Saudi inflation.
II) Research methodology
In this research after collecting the Saudi GDP and lnflation data from 2008 to 2020, we
plotted the data on line charts for both of the variables in order to identify the trend and timeseries components in both the GDP and inflation. We also computed a simple-index to
compare the two variables and estimated the correlation to determine whether there is a
relationship between the GDP and inflation and whether it is positive or not, and finally how
strong the relationship is to determine if GDP growth is a good indicator or not.
III) Research findings and discussion
Saud i GDP
1000
2008
2009
2010 2011
2012
2013
2014
201S
2016
2017 2018
2019
2020
Saudi GDP Growth
30.00°
2S00%
20.00“.,
15.00°
10.00°
S00%
5.00°›
10.00°
1S00°
20.00°
For the Saudi GDP, we identify an upward trend as the GDP is increasing on the long-term,
we also identify another time-series component which is a cycle that happens every 5-6 years
and we believe that is caused by the oil price cycle as the economy relies heavily on oil. The
decline in 2020 can be viewed as a random component and can be attributed to the COVlD-19
pandernic.
Saud Inflation
8.00°,
6.00°»
4.00°,
2.00,
0.00°S
z.oo°.s
2008
20 09
20 L0
2D 1 L
20 12
20 13
2014
2D L S
2016
2017
2018
202D
4.00,
For the Saudi inflation, when we compared it with the GDP growth we found the same
upward trend, we also identified the 2020 random component that we believe was caused by
the VAT increase from 5°/c to 1 5°/c during the pandemic. We also estimated the correlation
between Saudi GDP and inflation and the result was 0.848 which indicates that there is a
strong positive relationship between the two variables, which leads us to conclude that the
Saudi GDP might be a good indicator for forecasting Saudi inflation.
– Simple-index:
Year
Saudi GDP
Saudi Inflation
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
100.00
125.05
103.23
127.07
161.48
177.05
179.62
181.95
157.39
155.15
165.65
189.21
190.76
168.42
100.00
106.08
110.51
114.69
119.00
123.62
127.97
130.79
132.38
135.10
13400
137.29
134.42
139.04
2017
2018
2019
2020
-Actual percentage growth between the base period and the tenth pericd:
GDP = ( 155.15/ 100) -1 = 55.15%
lnflation = (135.10/100) -1 = 35.10*/r
-Actual percentage growth between the sixth period and the tenth period:
GDP = ( 155.15/ 1 77.05) — 1 = – I 2.37%
lnflation – (135.10/123.62)-1== – 9.29%
In conclusion, based on both the line charts and the simplicity indices, we believe that Saudi
inflation can be forecasted by Saudi GDP as both of the line chart and the simple-index
demonstrate the positive relationship between the variables and that inflation often lags the
GDP growth which can make it helpful in forecasting inflation.
Sources and References:
-The World Bank. (202 I ). UNDP pre›‹v th [unnuul °?e) – Saudi Atohio 1 Daur. Worldbank.Org.
httDs: //data.worldbank .ore/indicator/NY.GDP.MKTP.KDJ G ?1ocations=SA
– Statista. (2021 , November 1 6). C D£’ ‹;/.Souzfi Atohio 2026.
https://www.staiista.corn/statistics/265059/gross-domestic- product-of-saudi-arabia/
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