Businesses improve their expectations for economic development – NBU survey

This is evidenced by the findings of a survey of company top managers that the NBU conducted in the first quarter of 2021, Ukrinform reports with reference to the central bank’s press service.

“Business assessments of economic growth have improved for the first time since the first quarter of 2020. Forecasts for the development of own enterprises have improved. Respondents expect a slowdown in inflation and a weakening of the devaluation of the national currency in the next 12 months,” reads the report.

The business activity expectations index was 108.4%, returning to positive values. The index improved mainly due to high estimates of total sales of own products, financial and economic condition of enterprises, investment expenditures on machinery, equipment and inventory, as well as investment expenditures on construction.

Enterprises improved their expectations for the growth in production of goods and services in Ukraine in the next 12 months. The balance of responses rose to 5.6% against "minus" 24.4% in the fourth quarter of 2020. Inflation is expected to lower: the expected annual inflation was 7.7% in the first quarter compared to 7.9% in the previous quarter. Almost half of the surveyed companies expect that inflation will not exceed 7.5%. However, every third respondent predicts inflation above 10.0%.

In addition, expectations for financial and economic condition of the enterprises in the next 12 months significantly improved: the balance of responses - 12.7% (in the fourth quarter of 2020 - 1.3%). The highest expectations are among agricultural enterprises (balance of responses - 25.5%). In general, respondents of all types of economic activity expect improvement in their financial and economic situation, except for energy and water supply companies that believe that their situation will remain unchanged in the next 12 months.

The survey was conducted between February 3 and March 3, 2021 among 687 companies from 22 regions of Ukraine (apart from temporarily occupied territories of the Autonomous Republic of Crimea, Donetsk and Luhansk regions). Out of the polled companies, 18.3% are manufacturing companies, 16.0% - wholesale trade companies, 15.0% - agriculture companies, 13.2% - transportation companies, 6.8% - mining companies, 4.8 % - electricity and water supply companies, 4.5% - retail companies, 3.1% - construction companies, 18.2% - enterprises of other industries.

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