Businesses mitigated negative expectations and inflation assessment – NBU survey
Respondents' expectations of changes in the financial and economic situation of businesses in the next 12 months have slightly improved, although they still remain negative
What happened? Businesses mitigated negative expectations regarding the dynamics of production of goods and services in Ukraine in the next 12 months against the backdrop of active hostilities and terrorist attacks. This is evidenced by the results of a survey of CEOs on the business activity of their companies, which the National Bank conducted in Q4 2022.
Source. NBU website.
Details. The Index of Business Expectations (IBE) increased to 83.5% compared to 79.5% in Q3 2022. The slight diminishing of negative expectations was mainly due to less pessimistic assessments of investment spending and the number of employees. The indicator of negative expectations regarding the dynamics of production of goods and services in Ukraine in the next 12 months improved to 32.3% from 37.9% in Q3.
Inflation expectations moderated as well: in Q4 2022, expected annual inflation was 23.3% compared to 25.2% in the previous quarter. 71.8% of surveyed businesses believe that inflation in the next 12 months will not exceed 30%.
The devaluation of the national currency is expected to increase – respondents expect the exchange rate to be in the range of 42.59 UAH/USD (compared to 41.93 UAH/USD in Q3).
The respondents' assessments of the current financial and economic condition of their own businesses have slightly improved, although they still remain negative – -19.3% (compared to -21.8% in Q3); as well as expectations of changes in the financial and economic condition of businesses in the next 12 months – the indicator increased to 11.5% from -15.1% in Q3.
For the second quarter in a row, businesses continue to forecast a decrease in the pace of layoffs: from -25.5% in Q3 to -20.1% in Q4. An increase in costs of wages for employees in the next 12 months is expected as well: the balance of responses is 39.0% compared to 33.5% in Q3.
The share of respondents who plan to raise foreign investments in the next year has increased to 22.8% (in the previous survey it was 22.2%). Businesses that are already attracting foreign investments expect an increase in their volumes in the next 12 months: the balance of responses is 8.5% (compared to -1.4% in Q3 2022).
The share of those who plan to take out bank loans decreased to 35% (compared to 40.2% in Q3 2022). 84.9% of respondents prefer loans in national currency (86.3% in Q3). The most significant obstacle to attracting new loans remains high interest rates on loans – 49.5% of responses. Compared to the previous survey, the influence of the factor increased by 2.3 p.p.
The share of companies planning to raise funds abroad decreased from 9.5% in the previous quarter to 7.8%.
If you have read this article to the end, we hope that means it was useful for you.
We work to ensure that our journalistic and analytical work is of high quality, and we strive to perform it as competently as possible. This also requires financial independence. Support us for only UAH 196 per month.
Become a Mind subscriber for just USD 5 per month and support the development of independent business journalism!
You can unsubscribe at any time in your LIQPAY account or by sending us an email: [email protected]
