Businesses lower inflation and devaluation expectations
Businesses by the end of the fourth quarter of 2017 lowered expectations related to the growth of consumer prices for the next 12 months to 10.4% from 10% at the end of the third quarter, as well as the average annual exchange rate of the national currency to UAH 29.30 per $1 from UAH 28.46/$1, according to a survey for the fourth quarter of 2017 conducted by the National Bank of Ukraine (NBU) among enterprise managers.
According to the NBU, the share of optimistic respondents predicting a 12-month decline in consumer prices or growth within 9% has increased to 40.4% from 40.1% in the third quarter of 2017.
The share of respondents expecting depreciation of the hryvnia increased to 88.5% from 79.4% in the third quarter of 2017.
In addition, the majority of respondents - 59.6% - predicts that the exchange rate in 2018 will exceed UAH 29/$1.
At the same time, the NBU indicates that the business for the seventh consecutive quarter predicts an active growth in production volumes in Ukraine. The most optimistic in this case are agricultural enterprises, companies of processing industry, trade, energy companies and water supply companies.
The National Bank also said that the business maintains positive expectations regarding the high level of business activity - the index of business expectations is 115.2% (according to the results of the survey for the third quarter - 117.4%).
"A high pace of growth in economic activity remain, mainly due to an increase in forecasts for the growth of total sales of own products and the preservation of high investment costs for machinery, equipment and tools," the NBU said.
In addition, for the first time in the history of the survey, enterprises pointed out a shortage of their own production capacity in the event of an unexpected increase in demand.
Accordingly, an increase in investment spending in the next 12 months, mainly in equipment and machinery, is expected by enterprises of all types of activities, except construction.
The respondents indicated high prices for energy and raw materials among the main factors hampering the development of enterprises.
The survey was conducted from November 3 through December 5, 2017. A total of 670 enterprises from 22 regions were polled.
