The regular quarterly survey of enterprises' presidents/managers on their assessments of the current and future business activity, inflation and exchange rate expectations, and changes of the business environment in Ukraine was held in August 2008. 1,288 enterprises from all regions, which represented the economy according to principal types of activity, forms of ownership, and size measured by the number of employees, were interviewed.

The main research results of Ukrainian enterprises' business expectations: Inflation expectations for the next 12 months subsided and came to 15.8% against 17.1% in the previous quarter.

The assessment of general economic prospects for the next 12 months improved for the first time in four quarters. The balance of expectations (calculated as the difference between the percentage of positive and negative answers) remained negative, although it sagged and reached -35.3% against -52.2% in the 2^nd quarter of 2008.

Percentage of the respondents expecting a further rise of economic growth increased (by 10.2 p.p. to 73.2%).

The political situation remained to be the main driving force of inflation, according to the respondents (76.9% of answers against 80.5% in the 2^nd quarter of 2008). Influence of the exchange rate on the inflation processes, according to the respondents, considerably weakened (19.3% against 21.8% of answers in the 2^nd quarter).

The NBU activity was traditionally not considered by the respondents as a factor of inflationary pressure (according to 93.6% of respondents).

Expectations of the stability of UAH to USD exchange rate increased (46.4% of the respondents against 39.2% in the 2^nd quarter). Percentage of the respondents expecting depreciation of UAH against USD came to 34.7% against 24.5% in the 2^nd quarter.

The respondents continued to give positive assessment of their current financial and economic state. Balance of answers was 6.8% (increase by 1.6 p.p.). Further improvement of the financial and economic situation is expected for the next 12 months (the expectations balance came to 22.0% against 28.5% in the previous quarter).

Investment activity for the next 12 months is expected to remain at a high level. Investment volumes will increase in the construction area (expectations balance 14.3%) and in plant and equipment (expectations balance 35.6%). Expectations of increase in employment somewhat diminished but remained high (the balance came to 12.5% against 16.8% in the 2^nd quarter). There are no expectations of reduction in the number of employees in any type of economic activity.

The growth of prices for raw materials and supplies as well as energy sources remained the main deterrents of enterprises' income increase (according to 64.9% and 64.1% of respondents, respectively, against 68.1% and 64.6% in the previous quarter).

Percentage of respondents that had an intention to take bank loans continued to grow (by 0.3 p.p. and came to 63.4%). The respondents continued to name the high level of interest rates (79.1% answers, increase by 2.9 p.p.) as the main restraining factor for utilization of bank loan services.

More than 80% of the respondents admitted that they followed the NBU's activity, 11.2% of them – on a regular basis.

The provided data are the reflection of the respondents' views – Ukraine's enterprises as of August 2008, and do not represent the NBU's forecasts and assessments.