Inflation Rate in Spain with Forecast

Methodology

The inflation data presented in this visualisation is sourced from the World Bank and covers the period from 1960 to 2023. The inflation rates are annual percentages that reflect the change in the price level of goods and services in the economy.

Forecasting is performed using the Naive model, which is a simple forecasting technique where the next value is assumed to be equal to the last observed value. The forecast includes confidence intervals calculated at the 50%, 75%, and 95% levels to indicate the uncertainty around the forecasted values.

Confidence intervals are computed as follows:

• 50% Confidence Interval: Indicates that there is a 50% chance that the actual value will fall within this range.
• 75% Confidence Interval: Indicates a higher degree of confidence, suggesting that 75% of the time the actual value will fall within this range.
• 95% Confidence Interval: Provides a wider range, showing that there is a 95% probability that the actual value will be within these bounds.

Additional statistical metrics are provided to evaluate the model's performance, including Mean Squared Error (MSE) and Weighted Absolute Percentage Error (WAPE). These metrics help in assessing the accuracy and reliability of the forecasts.