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Businesses continue to report a positive Economic Outlook – Q1 2024 Business Outlook Survey

Businesses continue to report a positive Economic Outlook – Q1 2024 Business Outlook Survey

Businesses were more optimistic about their business activity over the next 12 months. Despite security risks and logistical difficulties, including those with crossing the border, respondents expected a moderate increase in the output of goods and services, while also reporting a positive outlook for the performance of their companies. Inflation expectations continued to improve, while exchange rate expectations deteriorated slightly.

The business outlook index (BOI) was 103.0%, up from 101.6% in Q4 2023 (“Q4”).

Respondents remained upbeat about their future financial and economic standings, future sales of their own products, and about investment in machinery, equipment and tools.

Respondents referred to the war and its repercussions as the most crucial factor in dampening the performance of their companies. The impact of qualified staff shortages has also increased noticeably.

Businesses’ macroeconomic expectations for Ukraine

For four quarters running, businesses have expected an increase in the output of Ukrainian goods and services over the next 12 months, albeit at a slower pace, the balance of responses being 8.5%, compared to 15.2% in Q4. Growth was expected across all companies, regardless of their type of economic activity (except the mining industry), across most oblasts, sizes in terms of staff numbers, and business activities.

Inflation expectations have been improving for six quarters in a row – in Q1 2024 the expected annual inflation rate for the next 12 months was 11.0%, compared to 11.3% in the previous quarter. Almost half of those surveyed (48.4%) expected inflation not to exceed 10.0%.

A total of 82.8% of respondents continued to believe ongoing hostilities to be the most important inflation driver. Production costs also remained an important factor of price growth (65.8%). The impact of the exchange rate increased, by 7.3 pp, to 59.5%.

Respondents slightly worsened their exchange rate expectations – the average UAH/USD exchange rate was projected to hit UAH 40.44 per USD 1 in 12 months (UAH 40.06 per USD 1 in the previous quarter). The percentage of respondents who expected that the UAH/USD exchange rate would not exceed UAH 40.00 per USD 1 in the next 12 months was 46.0%, down from 55.4% in the previous quarter.

Companies’ current standings and their business outlook

Although improving gradually, companies’ current financial and economic standings remained weak, the balance of responses was (-1.4%), up from (-5.6%) in Q4.

Respondents reported guarded views about an improvement in the financial and economic standings of their companies over the next 12 months, the balance of responses being 3.7%, down from in 4.1% in Q4. The most optimistic views were held by mining and construction companies, with balances of responses of 15.9% and 15.8% respectively.

Businesses continued to report positive expectations about total sales, including external sales, the balances of responses being 10.6% and 6.8% respectively, compared to 10.6% and 9.7% in Q4. Respondents across most sectors expected growth in total sales, with construction, agricultural and mining companies being the most confident of it (with balances of responses of 21.1%, 16.0% and 13.6% respectively). Growth in external sales was mostly expected by respondents from mining, manufacturing, trading, and transport and communications companies.

Respondents continued to report a positive investment outlook for machinery, equipment and tools, the balance of responses being 8.3%, compared to 6.6% in Q4. At the same time, respondents continued to soften their still pessimistic expectations for construction investment, the balance of responses being (-1.5%), compared to (-6.9%) in Q4.

Businesses that raise foreign investment continued to report expectations of investment growth over the next 12 months, the balance of responses being 16.1%, up from in 11.3% in Q4. The firmest expectations were declared by respondents from energy and water supply companies (62.5%).

The share of respondents who plan to raise foreign investment over the next 12 months was 22.8%, up from 20.7% in the previous survey.

Respondents continued to report intentions to cut their workforces over the next 12 months, the balance of responses being (-6.3%), compared to (-6.5%) in Q4. The dimmest expectations were reported by respondents from mining, construction and by energy and water supply companies, the balances of responses being (-20.5%), (-20.0%) and (-16.7%) respectively. Only trading companies have declared intentions to hire more staff for four quarters running.

Respondents reported stronger expectations of a rise in wage costs per staff member, the balance of responses being 62.6%, compared to 57.9% in Q4.

With companies’ unchanged expectations of their borrowing needs in the near future, the percentage of companies that plan to take out bank loans declined slightly, to 34.9%, compared to 36.0% in Q4.

Companies that intend to take out loans continue to prefer hryvnia loans – 81.1%, compared to 80.3% in Q4.

High loan rates remained the main factor deterring businesses from taking out new loans (49.5% of responses). At the same time, there was an increase in the impact of the availability of other funding sources and uncertainty to meet debt obligations as they fall due, by 1.9 pp to 42.1% and by 2.2 pp to 24.1% respectively.

The percentage of respondents who intend to take out foreign loans was 7.7%, practically unchanged on the previous quarter (7.8%). 


This quarterly survey was conducted from 31 January 2024 to 27 February 2024. A total of 661 companies in 21 oblasts took part in the survey (excluding the temporarily occupied territory of Crimea, as well as Donetsk, Luhansk and Kherson oblasts). Of the businesses polled, 21.8% were in wholesale and retail trade, 18.2% in manufacturing, 14.7% in agriculture, 13.6% in transport and communications, 6.7% in mining, 4.5% in energy and water supplies, 3.0% in construction, and 17.5% were in other sectors; 30.0% of the respondents were large companies, 38.1% medium companies, and 31.9% small companies. The findings presented reflect only the opinions of the respondents (top managers of Ukrainian companies), and should not be considered as NBU assessments.

The business outlook index is an aggregated indicator for companies’ performance expectations over the next 12 months. It is calculated on the basis of survey findings as the arithmetic mean of the balances of responses regarding companies’ financial and economic standings, total sales of their own products, investment spending on construction, machinery, equipment and tools, and regarding staff numbers. An index above 100 indicates that positive economic sentiment prevails in society, while an index below 100 shows that negative economic sentiment prevails


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