(Bloomberg) -- Inflation in Southeast Asian economies is set to hit its highest level in a decade next year, setting the stage for the start of monetary-policy tightening across the region, according to Bank of America.

Higher energy prices and a recovery in domestic demand and employment will drive inflation to an average of 2.7% in 2022, up from an estimated 2.2% this year, BofA Securities Asean economist Faiz Nagutha said in a media briefing Thursday. Vietnam and Indonesia are set to see the steepest price growth.

“Inflation is here, and it’s here to stay,” Nagutha said, adding that it will likely peak in the early part of 2022 before coming off a bit and staying at elevated levels. Global inflation is seen to hit 4.3% next year, up from 3.9% expected this year.

Key points from the briefing:

• The U.S. Federal Reserve will likely double the pace of reducing its asset purchases at its December meeting, and will deliver three rate hikes next year starting in June
• A faster Fed taper, along with accelerating inflation, will put pressure on some Asean central banks to tighten sooner
• Indonesia seen to hike by 75 basis points, Malaysia and Vietnam by 50 basis points, while Thailand and the Philippines are expected to raise their key rates by 25 basis points each next year
• Singapore may further tighten monetary policy on top of a 50-basis point increase in the currency slope expected in April

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