Inflation trends across the region are diverging. In Poland, the Czech Republic and the Baltics, strong growth is starting to hit capacity constraints, causing price pressures to build. Inflation has also picked up in Hungary and Turkey, though this should prove to be a temporary phenomenon. By contrast, inflation is falling in Russia, Slovakia and Romania, where strong currencies are a consistent theme. Inflation has also started to fall in Bulgaria, largely due to slower food price growth owing to recent warm weather.
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