<![CDATA[In general, inflation can be defined as an increase in prices. According to Statistics Indonesia (BPS), inflation is the tendency of prices of goods and services in general to rise continuously. In other words, inflation is a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money. High inflation becomes a burden for many parties. When inflation rises, it means the prices of goods and services in the domestic market increase. This price increase reduces the value of money. The decline in purchasing power reduces the ability of households with fixed incomes to buy daily necessities. An unstable rate of price increases also makes planning difficult for businesses and causes other negative impacts that are not conducive to the overall economy. For these reasons, every country seeks to control the rate of inflation. Economists understand that there are several reasons behind inflation. From the supply side, inflation in Indonesia is caused by rising prices due to higher input costs, government pricing policies, and supply shocks. Supply shocks refer to price increases caused by disruptions on the supply side, such as natural disasters, droughts, and distribution interruptions, which hinder the flow of goods to markets, thereby reducing supply, raising prices of goods, and ultimately increasing the rate of inflation. Indonesia is prone to earthquakes because it lies at the convergence of three tectonic plates: the Indo-Australian Plate, the Eurasian Plate, and the Pacific Plate. The island of Sumatra is located close to the meeting point of two plates the Eurasian Plate and the Indo-Australian Plate which are constantly moving and can cause earthquakes at any time. Natural disasters can lead to local or regional price increases. According to Hasbullah (2012), price increases in neighboring regions may be interrelated. Such interrelations between regions arise from mutual dependence in meeting the demand for goods and services. Several other studies also indicate that the prices of goods and services in a particular region are influenced by geographical proximity, especially among directly bordering areas.]]>
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