Model Building and Forecasting of Bank Credit to Public and Private Sector

Abstract

In this research the data comprises of the bank credit to public and private sector from 1983 to 2013. The main objective of the research is to select suitable model for the bank credit to public and private sector. For analysis purpose E-views version 5 has been used. First of all stationarity of the series has been checked and it is observed that the series of bank credit to public sector is stationary at first difference and series of bank credit to private sector is stationary at second difference. For identification of suitable ARIMA model correlogram has been performed and a class of models has been estimated. Most appropriate model is selected by applying different diagnostic checks and comparing several descriptive measures. Finally forecast has been made for the year 2014.