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A Hybrid Soft Computing Approach to Inflation Forecasting: HybridSutte Versus Exponential Smoothing Benchmarks in an Emerging Economy Ansari Saleh Ahmar; Abdul Rahman
Daengku: Journal of Humanities and Social Sciences Innovation Vol. 6 No. 2 (2026)
Publisher : PT Mattawang Mediatama Solution

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.35877/454RI.daengku4841

Abstract

Central banks in commodity-dependent emerging economies face a structural forecasting challenge: exponential smoothing methods calibrated on supply-shock training windows systematically overproject the downward trend into post-shock stabilisation phases, producing compounding errors that undermine monetary policy communication. This paper proposes HybridSutte, a soft computing model that fuses four-point alpha-Sutte recurrence with exponential smoothing correction, as an alternative to conventional exponential smoothing benchmarks. Monthly year-on-year Consumer Price Index data published by Bank Indonesia cover January 2021 through December 2025 (n = 60 observations), capturing Indonesia's complete monetary policy cycle: COVID-19 demand recovery, Russia-Ukraine commodity supply shock (peak: 5.95%, September 2022), Bank Indonesia's 250 basis-point rate-hike disinflation campaign, and the subsequent 2025 post-shock stabilisation within the 2.5% ± 1% target band. The 51/9 in-sample/out-of-sample partition places the evaluation window (April–December 2025) entirely within the structurally distinct post-shock stabilised regime. HybridSutte achieves out-of-sample RMSE of 0.606% and MAPE of 21.25%, compared with Holt's double exponential smoothing (ETS) RMSE of 3.069% and MAPE of 121.60%, yielding reductions of 80.2% and 82.5%, respectively. The performance advantage grows monotonically with forecast horizon h, reaching a 451.1% cumulative absolute error differential by  = 9. This is the first application of HybridSutte to central bank inflation data in an emerging market and the first to evaluate a soft computing hybrid model across a complete five-year monetary policy cycle. Findings support regime-aware model selection for central bank forecasting departments.
Co-Authors - Asmar Abdul Rahman Abdul Rahman Abdul Rahman Abdussakir Abdussakir Absussakir Abdussakir Achmad Sani Supriyanto Agung Tri Utomo Agus Nasir Ahmad Rifad Riadhi Ahmad Talib Aidid, Muhammad Kasim Akbar Iskandar Alfairus, Muh. Qodri Ali Mokhtar Alief Imron Juliodinata Alok Kumar Panday Alsa, Yudhistira Ananda Andika Isma ANDIKA SAPUTRA Andika Saputra Anggreni, Afrillia Annas, Suwardi Asfar Asmar Asmar, Asmar Astuti, Niken Probondani Aswi, Aswi Ayu Rahayu Azzajjad, Muhammad Fath Boj del Val, Eva Boj, Eva Botto-Tobar, Miguel Bustan, M Nadjib Cadena, Angela Diaz Dary Mochamad Rifqie Della Fadhilatunisa Dewi Fatmarani Surianto Dewi Satria Ahmar Djawad, Yasser Abd. Dunggio, Anugra S. S. Ersa Karwingsi Eva Boj Faizal Arya Samman Fathahillah Fathahillah Halim, Patmawati Hamzah Upu Hardianti Hafid Hastuty Hastuty Hastuty Hastuty Hastuty Musa Herman Herman Hidayat M., Wahyu Ifriana, Ifriana Ilimu, Edi Irwan Irwan Irwan Irwan Isma Muthahharah Izabi, Muh. Basyar Jamaluddin Jamaluddin Kamaluddin Kamaluddin Kasmudin Mustapa Khadijah Khadijah Khaeruddin Khaeruddin Kusmaladewi, K. Lince, Ranak M. Miftach Fakhri Magfirah Manalu, Yessi Febianti Mansyur Mansyur Marni Marni, Marni Meliyana R, Sitti Masyitah Miguel Botto-Tobar Misriani Suardin Mohd. Rizal Mohd. Isa Muhammad Abdy Muhammad Abdy Muhammad Arif Tiro Muhammad Arif Tiro Muhammad Farhan Muhammad Kasim Aidid Muhammad Kasim Aidid Muhammad Nadjib Bustan Muhammad Nadjib Bustan Muhammad Nusrang Muliadi N. Nurahdawati Nachnoer Arss Nasrul Ihsan Niken Probondani Astuti Novi Afryanthi S. Nur Anisa Nurdin Arsyad, Nurdin Nurhikmawati, Nurhikmawati Parkhimenko Vladimir Anatolievich Patmasari, Andi Poerwanto, Bobby Purnama Ningsih R. Ruliana R. Rusli R. Rusli Raden Mohamad Herdian Bhakti Rahman, Abdul Rahman, Muhammad Fatur Rahmat H.S Rahmat Hidayat Rahmat Hidayat Rahmat Hidayat Rais, Zulkifli Rajesh Kumar Ramli Umar Riny Jefri Rizal Bakri Robbi Rahim Rosidah Rosidah Rosidah Rosidah Ruliana Ruliana Ruliana, Ruliana Rusli Rusli Rusli Rusli Rusli Rusli Rusli Rusli Rusli Rustam, R. Rustam, Sitti Nailah Sahid Salim Al Idrus Salim Al Idrus Salsabila, Nurul Khofifah Sapto Haryoko Shofiyah Al Idrus Singh, Pawan Kumar Siswahyudianto Siti Nurazizah Auliah Sitti Masyitah Meliyana R. Sitti Rahmawati Sobirov, Bobur Sri Hastuti Virgianti Pulukadang Sri Muliani, Sri Sriwahyuni, Andi Ayu Suci Lestari Sutamrin, Sutamrin Suwardi Annas Suwardi Annas Syafruddin Side Tabash, Mosab Tonio, Sarinah Emilia Tri Santoso Triutomo, Agung Utomo, Agung Tri Wahab, Zamil wahyuni wahyuni Yunus, Asmar Zakiyah Mar'ah Zakiyah Mar'ah Zulkifli Rais Zulkifli Rais