Top fund manager Mihir Worah of PIMCO says not to be lulled into complacency by the low inflation we’ve seen in recent years.

“We expect global inflation over the next three to five years — or even the next five to 10 years — to be higher than it has been over the last 20 years,” Worah says in an interview posted on PIMCO’s site. “While we do not expect double-digit inflation, we do see inflation gradually climbing higher than the close-to-2% core numbers that we have gotten used to in much of the developed world.”

Worah says two main factors lead him to that conclusion: First, the serious debt problem in developed countries will likely be solved only via inflation; and second, a booming middle class in the emerging world could well lead to a secular rise in global commodities prices.

Worah talks about why he thinks inflation will be higher in emerging markets than developed markets, and why significant differentiation could occur within Europe in terms of inflation levels. He also talks about how to hedge a portfolio against inflation, with the core tool being developed market inflation-linked bonds.