Comparative Analysis of Random Forest and Multilayer Perceptron Algorithms for Predicting Gross Domestic Product

Abstract

This study examines the efficacy of machine learning techniques, particularly Multilayer Perceptron (MLP), and Random Forest and in forecasting Nigeria's Gross Domestic Product (GDP). Traditional statistical methods frequently fail to capture intricate, nonlinear relationships, thus necessitating advanced techniques. The dataset employed in this research encompasses 22 instances from 2000 to 2021. It includes variables such as GDP, healthcare expenditure, population, and the index of economic freedom obtained from the World Bank as well as the Nigerian Perceptions Index for corruption. The data was prepared to undergo training and testing following the CRISP-DM methodology. The models were trained and evaluated using a five-member cross-validation method. Performance metrics indicated that MLP outperformed Random Forest, with MAE values of 16.8228 and 25.3074 and RMSE values of 23.2111 and 33.2027, respectively. These findings suggest that MLP offers more accurate GDP predictions for Nigeria, effectively managing complex data relationships. This study provides valuable insights for enhancing predictive accuracy and supporting more effective economic planning and decision-making.