Despite the ongoing war, Ukrainian CEOs are expecting an increase in business activity in the next 12 months, for the second quarter in a row, the press service of the National Bank reports.
“Against the background of the stable functioning of the energy system, the respondents keep expecting growth in the production of goods and services, and also remain positive about the development of their own companies. Also, the improvement in inflation and exchange rate expectations remained in place,” the report says.
The index of business expectations of enterprises (IBE) did not change against the second quarter of 2023 and amounted to 104.5%. Among the factors of optimism are the strengthening of positive expectations regarding investment expenditures on machinery, equipment, and inventory, the total volume of sales of own products, and the softening of negative estimates regarding investment expenditures on construction works. At the same time, negative estimates regarding the number of employees increased.
For the second quarter in a row, businesses forecast growth in the volume of production of goods and services in Ukraine in the next 12 months: the balance of responses was 9.8% compared to 17.3% in the second quarter. Growth is expected by enterprises operating in most directions and types of economic activity, sizes by the number of employees, as well as in most regions. Inflationary expectations continued to improve: in the third quarter of 2023, the expected annual inflation was 14.8% against 15.7% in the previous quarter. The share of respondents expecting inflation below 15% increased to 52.2% from 46.6% in the previous survey.
Expectations regarding the level of devaluation of the national currency continued to weaken: the average value of the exchange rate, which respondents expected in 12 months, was UAH 40 per dollar (in the previous quarter, it was UAH 40.43/USD).
Despite positive trends, the current financial and economic condition of enterprises remains weak, and the overall assessment is negative: the balance of responses was -5.8% compared to -11.1% in the second quarter. At the same time, businesses maintained positive assessments of the expected financial and economic status of their own enterprises in the next 12 months: the balance of responses was 6% (in the second quarter of 2023 it was 9.6%). Improvement of the financial and economic condition is expected by enterprises operating in the vast majority of types of economic activity, the most optimistic in their assessments are construction businesses and processing industry – the balances of responses stood at 15% and 13.2%, respectively.
Those surveyed continue to expect an increase in the volume of product sales, including on the foreign market. Enterprises attracting foreign investments continue to expect an increase in their volumes in the next 12 months.
Among enterprises planning to raise loans, the share of those preferring loans in national currency has increased to 82% (in the second quarter, it was 79.2%). The most significant obstacle to attracting new loans remains excessively high rates (49.1% of responses). At the same time, the influence of the “excessive collateral requirements” factor increased by 2.2%, to 31.1%. The share of companies planning to raise funds abroad has slightly increased to 8.2% compared to 7.3% in the previous quarter. (Ukrinform/Business World Magazine)
