Predictive analysis of Somalia’s economic indicators using advanced machine learning models
Accurate Gross Domestic Product (GDP) prediction is essential for economic planning and policy formulation. This paper evaluates the performance of three machine learning models—Random Forest Regression (RFR), XGBoost, and Prophet—in predicting Somalia's GDP. Historical economic data, including...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2024-12-01
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| Series: | Cogent Economics & Finance |
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| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2024.2426535 |
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| author | Bashir Mohamed Osman Abdillahi Mohamoud Sheikh Muse |
| author_facet | Bashir Mohamed Osman Abdillahi Mohamoud Sheikh Muse |
| author_sort | Bashir Mohamed Osman |
| collection | DOAJ |
| description | Accurate Gross Domestic Product (GDP) prediction is essential for economic planning and policy formulation. This paper evaluates the performance of three machine learning models—Random Forest Regression (RFR), XGBoost, and Prophet—in predicting Somalia's GDP. Historical economic data, including GDP per capita, population, inflation rate, and current account balances, were used in training and testing. Among the models, RFR achieved the best accuracy with the lowest MAE (0.6621%), MSE (1.3220%), RMSE (1.1497%), and R-squared of 0.89. The Diebold-Mariano p-value for RFR (0.042) confirmed its higher predictive accuracy. XGBoost performed well but with slightly higher error, yielding an R-squared of 0.85 and p-value of 0.063. In contrast, Prophet had the highest forecast errors, with an R-squared of 0.78 and p-value of 0.015. For enhanced interpretability, SHapley Additive exPlanations (SHAP) were applied to RFR, identifying lagged current account balance, GDP per capita, and lagged population as key predictors, along with total population and government net lending/borrowing. SHAP plots provided insights into these features' contributions to GDP predictions. This study highlights RFR's effectiveness in economic forecasting and emphasizes the importance of current and lagged economic indicators. |
| format | Article |
| id | doaj-art-176f352b3ffa479da8ef5e59d5ac1be4 |
| institution | OA Journals |
| issn | 2332-2039 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj-art-176f352b3ffa479da8ef5e59d5ac1be42025-08-20T02:13:11ZengTaylor & Francis GroupCogent Economics & Finance2332-20392024-12-0112110.1080/23322039.2024.2426535Predictive analysis of Somalia’s economic indicators using advanced machine learning modelsBashir Mohamed Osman0Abdillahi Mohamoud Sheikh Muse1Simad University, Mogadishu, SomaliaDepartment of Management Information System, Cyprus International University, Lefkosa, North CyprusAccurate Gross Domestic Product (GDP) prediction is essential for economic planning and policy formulation. This paper evaluates the performance of three machine learning models—Random Forest Regression (RFR), XGBoost, and Prophet—in predicting Somalia's GDP. Historical economic data, including GDP per capita, population, inflation rate, and current account balances, were used in training and testing. Among the models, RFR achieved the best accuracy with the lowest MAE (0.6621%), MSE (1.3220%), RMSE (1.1497%), and R-squared of 0.89. The Diebold-Mariano p-value for RFR (0.042) confirmed its higher predictive accuracy. XGBoost performed well but with slightly higher error, yielding an R-squared of 0.85 and p-value of 0.063. In contrast, Prophet had the highest forecast errors, with an R-squared of 0.78 and p-value of 0.015. For enhanced interpretability, SHapley Additive exPlanations (SHAP) were applied to RFR, identifying lagged current account balance, GDP per capita, and lagged population as key predictors, along with total population and government net lending/borrowing. SHAP plots provided insights into these features' contributions to GDP predictions. This study highlights RFR's effectiveness in economic forecasting and emphasizes the importance of current and lagged economic indicators.https://www.tandfonline.com/doi/10.1080/23322039.2024.2426535GDP forecastingmachine learningrandom forest regressionSHAPeconomic indicatorsSomalia |
| spellingShingle | Bashir Mohamed Osman Abdillahi Mohamoud Sheikh Muse Predictive analysis of Somalia’s economic indicators using advanced machine learning models Cogent Economics & Finance GDP forecasting machine learning random forest regression SHAP economic indicators Somalia |
| title | Predictive analysis of Somalia’s economic indicators using advanced machine learning models |
| title_full | Predictive analysis of Somalia’s economic indicators using advanced machine learning models |
| title_fullStr | Predictive analysis of Somalia’s economic indicators using advanced machine learning models |
| title_full_unstemmed | Predictive analysis of Somalia’s economic indicators using advanced machine learning models |
| title_short | Predictive analysis of Somalia’s economic indicators using advanced machine learning models |
| title_sort | predictive analysis of somalia s economic indicators using advanced machine learning models |
| topic | GDP forecasting machine learning random forest regression SHAP economic indicators Somalia |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2024.2426535 |
| work_keys_str_mv | AT bashirmohamedosman predictiveanalysisofsomaliaseconomicindicatorsusingadvancedmachinelearningmodels AT abdillahimohamoudsheikhmuse predictiveanalysisofsomaliaseconomicindicatorsusingadvancedmachinelearningmodels |