Business assessments of economic growth in Ukraine have improved for the first time since the first quarter of 2020 – the index of business expectations of enterprises returned to a positive value of 108.4%. This is evidenced by the results of a survey of company executives conducted by the National Bank of Ukraine in the first quarter of 2021.
“The improvement of the index was mainly due to high estimates of total sales of own production, financial and economic condition of enterprises, investment costs for machinery, equipment and inventory, as well as investment costs for construction,” the statement said.
Now the business expects production growth over the next 12 months – the balance of responses increased to 5.6% against -24.4% in the IV quarter of 2020.
Inflation is also expected to decline: in the first quarter, the expected annual inflation was 7.7% compared to 7.9% in the previous quarter. The average value of the exchange rate that respondents expect in 12 months is UAH 29.15 / USD (in the previous quarter – UAH 29.68 / USD).
It is noted that the assessments of enterprises to change their financial condition in the next 12 months have significantly improved the balance of responses – 12.7% (in the IV quarter of 2020 – 1.3%). The highest expectations are in agricultural enterprises (25.5%).
Business expects an increase in sales, including in foreign markets. Optimistic sentiment prevails in all sectors of the economy, except for energy and water supply. The balance of responses is 18.0% against 7.1% in the fourth quarter of 2020.
Enterprises’ expectations regarding investment expenditures on machinery, equipment and inventory improved to 11.7% (against 3.8% in the fourth quarter), and on construction works to 1.4%. In addition, the volume of foreign investment by enterprises that attract them is expected to increase: the balance of responses increased to 10.4% from 7.0% in the IV quarter of 2020.
Businesses eased their expectations of a reduction in the total number of employees in their enterprises: the balance of responses was “minus” 1.9% (in the previous quarter – “minus” 9.9%). 62.9% plan to increase the salaries of their employees over the next 12 months. Only 2% of companies are ready to reduce salaries (3.7% in the fourth quarter of 2020).
The share of companies planning to take loans abroad has increased to 8.7% from 6.9%. Respondents named high rates (55.9% of respondents) and excessive collateral requirements (40.9%) as the main obstacles to attracting new loans.
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