Inflation is one of the serious economic indicators in Pakistan. Inflation can be crawling,\nwalking, running, hyper and stagflation according to nature. To model monthly inflation rate\nin Pakistan periodogram analysis and frequency domain analysis which is also known as\nFourier analysis or spectral analysis is used. After analyzing the data, inflation cycle length is\nobserved and appropriate Fourier series models are fitted to the data. Monthly inflation rate is\nalso analyzed by Auto Regressive Integrated Moving average (ARIMA). Further, models are compared and it is found that Fourier series models are more suitable to forecast inflation rate\nof Pakistan.
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