Forecasting the Remittance inflow Based on Time Series Models in Bangladesh

Md. Ziaul Hassan, Md. Siraj-Ud-Doulah and Shamima Nasrin Sathi

International Journal of Science and Business, 2020, vol. 4, issue 1, 13-23

Abstract: Remittance plays a very important role in the national economy. Remittance inflow in Bangladesh is one of the prime sources of foreign currency reserve. A certain amount of foreign currency reserve is indeed a vital need for the country because of its high degree of dependency on import. Inflow of remittance depends on the amount of manpower migration. Remittance earnings have increased more than five times during the past decade and it is currently the single largest foreign exchange earner for Bangladesh. Inward remittances to Bangladesh during the first six months of FY2011-12 stood at about USD 6.1 billion which is 9.3 per cent higher than the comparable period of the previous fiscal and Reaching an all-time high of 1491.36 USD Million in july of 2014 and a record low of 856.87 USD Million in September of 2017. The main purpose of this study is to forecast the next ten years Remittance in Bangladesh. Here, we applied different methods of time series and analyze the yearly Remittance data in Bangladesh over the period 1996-1997 to 2016-2017. We applied Box-Jenkin’s methodology to identify the actual model based on different model selection criterion. On the study at first we have checked the stationarity. For checking stationarity we have used both graphical method and Dickey Fuller test. Then to find the appropriate model for Remittance we have used the ACF, PACF curves. In this research, we found that ARIMA (1, 1, 0) model is suitable for the forecasting the Remittance in Bangladesh. Comparing between the original series and forecasted series, we found that the Remittance flow is in Bangladesh is projected to increasing.

Keywords: Remittance inflow; Box-Jenkin’s methodology; Dickey Fuller Test; ACF; PCAF; ARIMA Model; Forecasting (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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