Inflation Prediction in Indonesia Using Extreme Learning Machine and K-Fold Cross Validation

Abstract

Inflation rate forecasting is an important aspect in supporting economic policies and price control by the government. This study aims to evaluate the performance of the Extreme Learning Machine (ELM) algorithm in forecasting the inflation rate in Indonesia and provide inflation prediction results for 2025. The data used is historical data on Indonesia's inflation rate for the period 2003–2024. The analysis process begins with data normalization to ensure a uniform scale, followed by data partitioning using 10-Fold Cross Validation. The ELM model was built with 30 hidden neurons, a sigmoid activation function, and a regularization parameter of 0.8. The test results show that the ELM algorithm has superior performance. This is evidenced by the average MAPE value of 1.71%, RMSE of 0.0359, and coefficient of determination (R²) of 0.9833, indicating very high accuracy. The inflation prediction for January to December 2025 is in the range of 1.517%–1.761%, with an average approaching 1.663%, indicating a relatively stable pattern throughout the year. Based on these results, the ELM algorithm can be used as an effective alternative method for forecasting time series data, particularly in the context of inflation. This research is expected to serve as a reference for the government in establishing inflation control policies and for other researchers interested in applying artificial intelligence models to economic analysis.