According to a survey by the National Bank of Ukraine, for the third quarter in a row, domestic businesses have been looking to the future with a positive outlook and have positive expectations regarding key indicators and aspects of business activity, according to .
The quarterly survey of the National Bank was conducted from 31 October to 28 November 2023. The survey involved 659 companies from 21 regions of the country. In general, the NBU says that businesses expect business activity to grow for the third quarter in a row, albeit at a slightly slower pace.
Thus, the Business Confidence Index (BCI) was 101.6% compared to 104.5% in the third quarter of 2023, the NBU said. A slight recovery in business activity is forecast due to continued positive expectations for total sales of own products, investment spending on machinery, equipment, and inventory, and the future financial and economic situation.
For the third quarter in a row, the business also forecasted growth in the production of goods and services in Ukraine over the next 12 months, reinforcing its positive expectations. Inflation expectations have been improving for the fifth quarter in a row: in Q4 2023, annual inflation was 11.3% over the next 12 months, compared to 14.8% in the previous quarter. Almost a quarter of respondents (24.8%) expected inflation to be in the range of 7.6% to 10.0%.
At the same time, expectations regarding the level of devaluation of the national currency slightly deteriorated: the average value of the exchange rate that respondents expect in 12 months is UAH 40.06 per USD. USD (in the previous quarter – 40.00 UAH/USD).
Regarding the assessment of their own performance, businesses are cautious about the improvement in the financial and economic condition of their enterprises in the next 12 months: the balance of responses is 4.1% (in the third quarter of 2023 – 6.0%).
Also, survey participants remain optimistic about their forecasts for sales volumes, including on the foreign market: the balance of responses is 10.6% and 9.7%, respectively (in Q3 2018: 16.8% and 10.6%, respectively).
At the same time, the respondents’ forecasts for changes in the number of employees at their enterprises over the next 12 months remain negative: the balance of responses is minus 6.5% (in the third quarter – minus 7.0%). Also, a more rapid increase in labour costs per employee is expected: the balance of responses is 57.9% compared to 47.2% in the third quarter.