https://github.com/szymon-budziak/predicting_inflation_in_poland

Forecasting future inflation in Poland using selected economic indicators through models like ARIMA, Prophet, XGBoost and LSTM.
https://github.com/szymon-budziak/predicting_inflation_in_poland

arima darts economics forecasting inflation lstm prophet python3 xgboost

Last synced: 7 months ago
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Forecasting future inflation in Poland using selected economic indicators through models like ARIMA, Prophet, XGBoost and LSTM.

• Host: GitHub
• URL: https://github.com/szymon-budziak/predicting_inflation_in_poland
• Owner: Szymon-Budziak
• License: mit
• Created: 2024-04-25T13:42:15.000Z (over 1 year ago)
• Default Branch: main
• Last Pushed: 2024-07-30T16:16:46.000Z (about 1 year ago)
• Last Synced: 2025-02-01T02:49:48.498Z (9 months ago)
• Topics: arima, darts, economics, forecasting, inflation, lstm, prophet, python3, xgboost
• Language: Python
• Homepage:
• Size: 3.83 MB
• Stars: 0
• Watchers: 1
• Forks: 0
• Open Issues: 0
• Metadata Files:
  • Readme: README.md
  • License: LICENSE

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README

          
# Predicting inflation in Poland

This project is aimed at predicting future inflation in Poland based on selected economic factors. Predicting inflation

is not an easy task, as it is influenced by many factors, such as the state of the economy, monetary policy, and

geopolitical factors. The project uses several models to predict inflation in Poland, such as ARIMA, Prophet, XGBoost,

and LSTM.

## Installation

The project uses Poetry to manage dependencies. To install the dependencies, run the following command:

```bash

poetry install

```

## Data

The data used in this project comes from the several sources and can be found in the `data` directory. The data is

stored in the `csv` and `xlsx` files. The data consists of the following files:

- Monthly HICP indicators for Poland, Germany, and the Eurozone

- Monthly core inflation in Poland

- Monthly macroeconomic indicators for Poland

- Monthly CPI indicators for the Eurozone

- Monthly CPI indicators for Germany

Why were data from Germany and the Eurozone included in forecasting inflation in Poland?

- Strong economic ties - Poland has strong trade and economic ties with Eurozone countries, and their main trading

  partner is Germany

- Poland has strong trade and economic ties with Eurozone countries, and their main trading partner is Germany

- Impact on export and import - the Eurozone is the main market for Polish goods and services

- Monetary policy - the monetary policy conducted by the ECB has an indirect impact on Poland

- Capital flow - capital movements can affect exchange rates and the level of inflation

# Models comparison

Several models were tested to predict inflation in Poland. The models were evaluated based on the RMSE metric. The

models and result are as follows:

- Naive Seasonal

  ![Naive Seasonal](src/inflation_prediction/images/Naive_Seasonal_Forecast_compared_to_actual.png)

- ARIMA

  ![ARIMA](src/inflation_prediction/images/ARIMA_compared_to_actual.png)

- Prophet

  ![Prophet](src/inflation_prediction/images/Prophet_compared_to_actual.png)

- XGBoost

  ![XGBoost](src/inflation_prediction/images/XGBoost_compared_to_actual.png)

- LSTM

  ![LSTM](src/inflation_prediction/images/LSTM_compared_to_actual.png)