Canada Inflation to Slow Next Year, Manulife Strategists Say
Canada Inflation to Slow Next Year, Manulife Strategists Say
(Bloomberg) -- Manulife Financial Corp.’s wealth and asset management unit expects inflation to moderate next year even as it remains a concern.
“We think that the majority of inflation expectations are already priced in,” Macan Nia said in an interview. It’s likely rising prices will garner less attention as inflation comes off the 4%-5% levels seen today, Nia said.
Nia and Kevin Headland were promoted to co-chief investment strategists of Manulife Investment Management on Monday, succeeding Philip Petursson, who left to join IG Wealth Management.
Canada’s consumer price index rose 4.4% in September from a year earlier, according to official data, the highest reading since February 2003. The inflation rate is expected to decline to 2.6% in 2022 compared with 3.1% this year, according to data compiled by Bloomberg.
The challenge with rising rates is that it’s an “invisible tax” on the retirement income of clients, Nia said, noting that the headwinds facing fixed income in 2022 are likely to be less dramatic than this year.
Another positive for the economy is that supply chain difficulties will likely ease, Headland said.
“A lot of the supply chain disruptions have been longer than anticipated, but I think we’re confident that eventually they will abate, but it will take some time,” he said.
Among their other comments:
- Emerging markets in Asia are “a very misunderstood asset class,” said Headland
- The demographics and fundamentals of emerging markets and the growing middle class represent an opportunity for Canadian investors
- Exposure to that market will be positive for long-term investors
Manulife Investment Management had C$1 trillion ($834 billion) in assets under management and administration as of June 30.
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