Some improvement was, however, observed compared to the previous survey.

The slight recovery in opinions was contributed to by a moderate recovery in domestic demand and less negative conditions for investing, especially in services, which are accompanied by the stability of expected investment spending.

At the end of the year, the worsening of opinions on access to credit for all sectors eased and nine out of ten companies declared their liquidity conditions to be at least sufficient. For the first quarter of 2024, businesses expect employment growth to continue, the central bank said in a release.

The price dynamics charged by companies has continued to weaken and is expected to weaken further over the next 12 months.

Around two thirds of companies expect an increase in the hourly wages of their employees in the next 12 months and almost a third declare that they have already taken into account any future salary increases in their price lists during 2023.

Consumer inflation expectations have fallen sharply across all time horizons, settling just below 2.5 per cent on short-term horizons and just above 2 per cent on long-term horizons.

An overwhelming portion of respondents in the survey still saw a small or no likelihood of a cyclical upturn over January to March this year, broadly in line with the previous quarter.

The improvement in sales was driven by domestic demand, while foreign demand remained weak.

The gap between firms planning to hire and those expecting to reduce their staff widened slightly from the previous survey—from 8 to 11 percentage points.

In the fourth quarter, the share of firms reporting difficulties associated with energy prices held stable in industry excluding construction and in services. However, the portion of firms planning to raise selling prices in the following quarter in response to high energy costs fell from the last survey, with a significant decline year on year.

Consumer price inflation expectations fell sharply across all time horizons, returning to the same levels as in the second half of 2021 and just above 2 per cent.

The average consumer price inflation rate is expected to be 2.4 per cent six months from now, down from 5.1 per cent in the previous survey, 2.3 per cent in 12 months (from 4.7 per cent earlier), 2.1 per cent in two years (from 4.2 per cent earlier) and 2.1 per cent over the three- to five-year horizon (from 3.8 per cent earlier).

Fibre2Fashion News Desk (DS)