The Determination Analysis of Inflation in North Sumatra-2019

The differences in inflation rates among several cities in North Sumatra still occur even though
local governments have been struggling to control it. There are many conditions and uniqueness
in North Sumatra that may bring the unique figure of inflation. This research aims to analyze the
factors causing inflation based on four cities, that is Sibolga, Padang Sidempuan, Pematang
Siantar, and Medan, as the distribution line for the basic needs in North Sumatra. Variables that
will be examined as independent variables are inflation, population, regional minimum wages,
economic growth, and rice prices from 2007-2017. Data are taken from various related sources,
such as Bank of Indonesia, Central Bureau of Statistics, Departement of National Development
and Planning, and Government of Medan City. Data will be investigated the approvement of its
classical assumption before analyzed using Panel Data Regression. Results indicate that the
population, regional minimum wages, population, and price of rice have a positive effect, while
economic growth and regional minimum wages have a negative impact on the inflation rate in
North Sumatra