Explain what would happen to the economy if inflationary expectations are formed on the basis of a prolonged shortage in supply and increasing food prices.

Prices of foodstuffs, including essential items such as rice and milk, have risen in recent months, causing higher inflation rates in Asian countries, such as India, China, Thailand, and Indonesia. In Indonesia, food prices in January rose by 3.72% compared to the 2.78% rate of increase recorded in December.
Indonesia’s central bank has kept its benchmark interest rate steady as it believes that the rise in food prices, especially rice, is pushing the level of inflation.
It expects the coming rice harvest to increase supply and ease the pressure on food prices. An unexpected bad harvest, however, would pose serious problems for the government.