Monitoring of businesses: most notable growth in Business Climate Index over last three months
In February, the Bank of Russia’s Business Climate Index rose to 4.7 points (from 3.0 points in January). Enterprises upgraded both their current assessments of business conditions and the short-term expectations about output and demand.
Companies' investment activity continued to recover in 2022 Q4 after a noticeable decline at the beginning of the year. Businesses maintained existing production capacities and upgraded them while import substitution programmes were strengthened and some demand shifted to domestic products. Production capacity utilisation grew steadily — almost to 80%, which is a record high since 2002.
In February, businesses’ price expectations edged down for the second month in a row.
In their business plans for 2023, companies assume that inflation will be 9.8% on average, which is markedly above the Bank of Russia’s forecast. This indicates increased proinflationary risks in the short term.
More details are available in the February issue of the information and analytical commentary Monitoring of Businesses: Assessments, Expectations and Comments.