Modeling and Forecasting GDP per Capita in Rwanda

DRJ - Journal of Economics & Finance, 4 (2), pp. 21 - 29.

9 Pages Posted: 8 Apr 2019

See all articles by Thabani Nyoni

Thabani Nyoni

University of Zimbabwe

Wellington Garikai Bonga

Great Zimbabwe University

Date Written: March 6, 2019

Abstract

Using annual time series data on GDP per capita for Rwanda from 1960 to 2017, the study analyzes GDP per capita using the Box – Jenkins ARIMA technique. The ADF tests showed that Rwandan GDP per capita data is I (1). Based on the AIC and the Theil’s U, the study presents the ARIMA (3, 1, 1) model. The diagnostic tests further showed that the presented parsimonious model is quite stable and acceptable. The results of the study indicate that living standards in Rwanda will continue to slowly improve over the next decade. Vision 2020’s “middle income status” goal is likely not to be achieved, although this does not obliterate Rwanda’s success story of significantly reducing extreme poverty. Indeed, Rwanda’s economy is growing and other African countries must learn from Rwanda’s experiences. The study offers policy prescriptions in an effort to help policy makers for Rwanda on how to promote and maintain the much needed sustainable growth in Rwanda.

Keywords: ARIMA, Box – Jenkins, Economic Growth, GDP per capita, Forecasting, Poverty, Rwanda

JEL Classification: C53, E37, O47

Suggested Citation

Nyoni, Thabani and Bonga, Wellington Garikai, Modeling and Forecasting GDP per Capita in Rwanda (March 6, 2019). DRJ - Journal of Economics & Finance, 4 (2), pp. 21 - 29.. Available at SSRN: https://ssrn.com/abstract=3347708

Thabani Nyoni (Contact Author)

University of Zimbabwe ( email )

Mashonaland
Zimbabwe

HOME PAGE: http://www.uz.ac.zw

Wellington Garikai Bonga

Great Zimbabwe University ( email )

P. O. Box 1235
Masvingo
Masvingo, Masvingo 00263
Zimbabwe

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