Business Forecast: Inflation Expectations in Ukraine Continue to Rise.

Ukrainian Enterprises Foresee Rise in Consumer Prices

The latest report from the National Bank of Ukraine 'Business Expectations of Enterprises in Ukraine' for the fourth quarter shows that Ukrainian business circles anticipate a rise in consumer prices of 10.3% over the next year.

This continues the deterioration of inflation expectations, which has persisted for the second consecutive quarter.

Forecast analysis suggests a decrease in inflation from 11.3% in the fourth quarter of 2023 to 11.0% in the first quarter of 2024, followed by a gradual increase to 9.0% in the second quarter and 9.7% in the third quarter of 2024. The overall trend indicates a growth in inflation expectations, reflected by the figure of 10.3%.

Among those surveyed, 46.3% expect inflation to be at 10%, a decrease from 54.4% in the previous quarter. On the other hand, 17.8% of respondents allow for the possibility of exceeding 15.1%.

The factor of military aggression is the main influence on price increases, as stated by 82.9% of respondents. Interestingly, the significance of the factor of tax changes increased by 4.4 percentage points to 42.3%. Meanwhile, the influence of the exchange rate decreased by 5.1 percentage points to 70.3%.

The study covered 660 enterprises from 21 regions of Ukraine excluding temporarily occupied territories of AR Crimea, Donetsk, Luhansk, and Kherson regions. This gives us representativeness of the obtained data for most regions of the country.