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 the country was held in February 2008. 1,292 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:

The assessment of general economic prospects for the next 12 months has become considerably worse. The balance of expectations (calculated as the difference between the percentage of positive and negative answers) reached - 25.1%.

Inflation expectations have grown stronger. The expected average inflation for the next 12 months reached 15.6% against 13.6% in the previous quarter.

The political situation remained to be the main driving force of inflation, according to respondents (79.0% of answers, drop by 2.1 p.p.). The influence of the economic situation on the rise of consumer prices increased (73.7% of answers, increase by 0.4 p.p.). Influence of the exchange rate considerably weakened (6.2% against 11.2% in the 4^th quarter).

Expectations of the exchange rate stability increased. Percentage of the respondents expecting UAH to USD exchange rate to remain unchanged grew to 65.6% against 54.9% in the 4^th quarter of 2007.

The NBU activity was traditionally not considered by respondents as a factor of inflationary pressure (according to 98.7% of respondents).

The cost of energy sources intensified its negative impact on the level of selling prices (percentage of the respondents that stated this as the key factor amounted to 76.6%). This factor along with the rise of prices for raw materials and supplies were the main brakes for enterprises' income increase.

Expectations of the investment activity rise for the next 12 months remained at a high level (expectations balance came to 32.8% against 35.3% in the 4^th quarter), in particular at the industry and construction enterprises.

Expectations of the increase in employment further improved (the balance reached 19.2% against 15.3% in the 4^th quarter).

The respondents' positive assessment of their current financial and economic state weakened (balance of answers 7.2%, reduction by 3.1%). But for the next 12 months the financial and economic situation is expected to improve (the expectations balance came to 28.4%; dropped by 1.0 p.p.).

The respondents noted a further improvement in the access to bank loans (the balance of answers was 17.7% against 21.5% in the 4^th quarter 2007).

The respondents continued to name the high level of interest rates (74.1% answers, increase by 0.3 p.p.) and excessive requirements for mortgage value (38.2% answers, drop by 3.6 p.p.) as the main restraining factors for making use of bank lending services.

Percentage of the respondents that had an intention to take bank loans decreased by 2.7 p.p. and came to 57.9%. Among them, the percentage of those who planned to take the next loan in UAH dropped by 1.8 p.p. to 76.6%.

More than 80% of respondents admitted that they kept an eye on the NBU activity, 11.1% of them – on a regular basis.

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