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 November 2007. 1,286 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 grown considerably worse. The balance of expectations (calculated as the difference between the percentage of positive and negative answers) reached (- 17.2%) against (-8.5%) in the 3^rd quarter of 2007.

Inflation expectations kept increasing for the second consecutive quarter. The expected average inflation for the next 12 months reached 13.6% against 11.7% in the previous quarter.

The influence of the political situation on the rise of consumer prices deepened (81.1% of answers, increased by 2.6 p.p. as compared with the 3^rd quarter). Also, one could observe a growth of influence of the economic situation (73.3% of answers, increased by 3.5 p.p.) and the exchange rate (11.2% against 8.2% of answers in the 3^rd quarter).

The finished goods inventory balance remained too low, which showed the retaining of the situation of demand exceeding supply and the respective inflationary pressure.

The NBU actions were traditionally not considered by respondents as a factor of inflationary pressure (according to 98.4% of respondents), which showed the positive assessment of the National Bank of Ukraine activity in the area of price stability maintenance.

Expectations for the exchange rate stability continued to weaken. Percentage of the respondents expecting UAH to USD exchange rate to remain unchanged dropped to 54.9% against 65.7% in the 3^rd quarter. Expectations for UAH to grow against USD strengthened (percentage of respondents increased by 8.9 p.p. and reached 26.4%).

Investment activity will retain at a high level for the next 12 months. Expectations of investment demand growth improved (expectations balance came to 35.3% against 28.0% in the 3^rd quarter), in particular at the industrial enterprises.

Further job creation is expected for the next 12 months (the balance reached 15.3% against 13.6% in the 3^rd quarter).

The respondents' assessment of their current financial and economic state keeps improving and is the highest for the history of this survey (10.3%, increase by 3.0 p.p.). For the next 12 months the financial and economic situation is expected to further improve: the expectation balance grew by 0.9 p.p. and came to 29.4%.

The growth of prices for energy sources intensified its negative impact on the level of selling prices and enterprises' profitability. Percentage of respondents that stated these as the key factors amounted to 75.57% and 71.5% respectively, which indicated the launch of expenditures inflation.

Expectations of growth in own output realization volumes improved, particularly in the trade. The negative expectations balance of the growth rates of own output realization volumes for the next 12 months considerably decreased and came to (-13.5%) against (-19,0%).

The respondents noted a further improvement in the access to bank loans. The answer balance reached 21.5%.

The respondents continued to name the high level of interest rates (73.8% answers, growth by 1.3 p.p.) and excessive requirements for mortgage value (41.8% answers, decline by 3.4 p.p.) as the main restraining factors for utilization of bank loan services.

Against a background of the expected growth of demand for loans, percentage of the respondents that had an intention to take bank loans increased by 0.6 p.p. and came to 60.6%. Among them, the percentage of those who planned to take the next loan in UAH grew by 2.3 p.p. to 78.4%.

Nearly 80% of respondents admitted that they kept an eye on the NBU activity, 11.7% of them – on a regular basis. The analysis of the received information showed a tight connection between the good knowledge of the NBU activity and higher indicators of own development.

The provided data are the reflection of the respondents' views – Ukraine's enterprises as of November 2007, and do not represent the NBU's forecasts and assessments.