Central Europe's inflation is close to bottoming out

With oil prices stabilizing at around USD 60/bbl, the passthrough to fuel-price inflation is expect to end this quarter. This is also signaled by PMI sub-indices for input and output prices.
 
The only unknown is the pace of reflation: despite good domestic demand growth and closing output gaps, second-round effects from supply-side shocks are still weighing on core inflation. 

Unicredit notes in a report on Tuesday:

• Inflation is expected to turn positive in 4Q15 in Hungary and Poland and stay well below target this year in the Czech Republic and Romania.
  
  
• All Central European central banks face the risk of inflation rising faster than they project at the moment, but the risk of overshooting targets by a large margin or for a long period is limited.
• In Russia and Turkey, the risks are that inflation will overshoot official estimates.