ТHE METHODOLOGY FOR INFLATION’ FORECASTING BY THE BANK OF RUSSIA IN THE MEDIUM TERM

Abstract

The paper sets out to examine approaches to the forecasting of inflation by a macro market regulator. Various approaches to short-term inflation forecasting, inflation factors and their main channels of influence used by bank regulators in various countries are studied. The shortcomings of the used models for predicting inflation in the post-pandemic economy have been formulated. A comparative analysis of the use of various models has been conducted and solutions for building forecasting models in the medium term have been proposed. The approach has been tested for regional inflation forecasting; calculations of the indicators using VAR model, SARIMA, and dynamic method have been presented.  It is proposed to use extended combined VAR models supplemented with exogenous factors for medium-term forecasting.