Forecasting

Forecasting revenue in a market with Ramadan

Backtesting OLS against Holt-Winters, excluding in-progress months, and layering a KSA Ramadan regressor so seasonal peaks stop breaking the model.

All articlesJun 2026 · 9 min read

Generic forecasting models assume the year is smooth. In the Gulf it is not. Ramadan moves roughly eleven days earlier each Gregorian year and reshapes demand for a month, and a naive model treats the resulting spike as either noise or a permanent trend. Both interpretations are wrong.

Pick the model with evidence, not taste

Rather than committing to one method, a good engine backtests candidates on the history it already has. Ordinary least squares captures a clean trend; Holt-Winters captures seasonality when there is enough history to learn it. A rolling-origin backtest measures each on out-of-sample error, lets the data choose, and reports the resulting error so the forecast arrives with a known accuracy rather than false confidence.

Clean the inputs first

  • Exclude the in-progress month, which is always partial and drags the trend down.
  • Dampen extreme spikes so a single viral day does not become the model’s new baseline.
  • Add an explicit Ramadan regressor keyed off the Islamic calendar so the seasonal bump is modelled, not smoothed away.

A forecast without a measured error bar is just a confident guess.

Make it auditable

The final discipline is snapshots. Store what the model predicted, then compare it against what actually happened, month after month. Over time you accumulate a predicted-versus-actual track record that tells you whether to trust next month’s number, turning forecasting from a party trick into a planning tool.

Written by the Ryze Analytics team · Dubai & Riyadh

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