Inflation Rate Prediction in Kuwait, Research Paper Example

Problem statement

Constant inflation exists in Kuwait. Inflation has resulted from demand-pull factors like increased wages, reduced interest rates, and more money supply (Liao, 2017). Increased wages has caused various adverse effects to the country like fall in employment rates. Also, companies hike prices of products hence causing inflation. Low-interest rates have caused people to direct their savings into purchasing of assets, goods, and services without lending. As a result, the economy contracted. Increased money supply in the economy has affected the exchange rates causing inflation. In addition to that, other cost-push factors exist that have caused inflation. These include devaluation and increased value-added tax. Devaluation has resulted in the high price of imports (Martin, 2019). Value-added tax is regressive hence affects poor people in Kuwait. Generally, the inflation rate is on a rising trend. These factors are the primary cause of inflation in the country. They have aroused interest to advance research in this area and come up with necessary predictions. After that, recommendations will be made on how to curb inflation issue, reinstate deflation in the country, and ensure restoration of a stable economy.

References

Liao, Y. (2017). Machine Learning in Macro-Economic Series Forecasting. International Journal of Economics and Finance, 9(12), 71-76.

Martin, L. C. (2019). Machine Learning vs Traditional Forecasting Methods: An Application to South African GDP (No. 12/2019).