Copyright: © 2022 IMM
ISSN 2719-2407 (Online) 1
Modeling Consumer Price Index of Thailand
K.M.U.B. Konarasinghe
Institute of Mathematics and Management, Sri Lanka
udaya@imathm.edu.lk
ABSTRACT
The CPI attempts to quantify the overall price levels of goods and services in an economy
and to measure the purchasing power of a respective country's currency unit. The CPI is
used in the calculation of many key economic indicators that require country's unit of
currency measures, including estimates of income, earnings, productivity, output, and
poverty. Thailand's CPI shows an upward trend. This study designed to forecasts the CPI
of Thailand. Monthly CPI data of Thailand for the period of May 2012 to October 2021
were obtained from the International Monitory Fund (IMF) database. Auto-Regressive
Distributed Lag Model (ARDLM), Double Exponential Smoothing (DES), and
Autoregressive Integrated Moving Average (ARIMA) models were tested to forecast the
CPI of Thailand. Auto Correlation Function (ACF), Anderson Darling test and Ljung-
Box Q (LBQ) test were applied to test the model assumptions. The relative and absolute
measurements of errors were applied to assess the forecasting ability of the model.
Results of the study revealed that the ARDLM with lags 1 and 2 is the most suitable
model to forecast the CPI of Thailand. The future values of the CPI can be forecasted by
the value of the last month and the month before. It is strongly recommended to design
more studies on modeling the CPI for other countries furthermore.
Keywords: Consumer Price Index, Inflation, ARDLM, ARIMA,
Journal of New Frontiers in Education
and Social Sciences
ISSN 2719- 2407 (Online)
Volume 2 (1) 2022, 1-15
Home page: www.imathm.edu.lk/publications