We have repeatedly drawn attention to the comparative features of the results of the Razumkov Centre surveys regarding the economic feelings and assessments of households about the "correctness" of the development of the situation in the country. A significant role in the psychological perception of "correctness" belongs to the current economic state (family well-being) and economic stability of households, as well as the so-called confidence in the future. If a respondent believes that things are moving in the right direction, in most cases it means that he has positive current and long-term expectations regarding his own well-being. However, economic improvement cannot "make up" for losses, omissions, deficiencies in other public, social and humanitarian spheres. Therefore, the growing gap between the dynamics of (improving) well-being and (deteriorating) socio-political atmosphere points to the growing public dissatisfaction with the actions of the authorities.

In particular, in the periods of "calm" (free of external shocks or internal political disturbances) development of the country, economic factors (relative stability and predictability of the work of enterprises, gradual, albeit insignificant, increase in wages) become decisive for the assessment of the current state and nearest prospects of the well-being of households and businesses alike.

Similarly, in periods of acute external shocks (coronavirus pandemic, Russian aggression), the economic components of the country development are subordinate to the socio-political ones, first of all, due to the unification of society to resist the crisis shock, and the similarity in assessments of the situation and the direction of its changes is manifested in similar assessments at the level of households and enterprises.

In other periods (when troubles are mainly internal in nature), the feelings and assessments of the country's development given by households and enterprises often differ. Moreover, the very difference in such assessments (of households and enterprises) is evidence to growing internal contradictions, dissatisfaction with the authorities or fallacy of the current socio-economic policy. Such results, although of a subjective nature, can nevertheless serve as a "hint" regarding positive changes or "bottlenecks", which create, respectively, incentives or barriers on the road of the country development.

(1). One of the central issues in the Razumkov Centre surveys is the question about the correctness of the country's trajectory. The distribution of answers to this question largely reflects the generalized current achievements and controversies of the country development.

Last year, before the full-scale invasion, despite relatively stable (albeit weak) economic growth, the situation in the country was characterized by an increase in political confrontation. And despite the consistent increase in wages, the number of those who in mid-2021 believed that events were developing in a wrong was almost three times higher than the number of those who suggested that the country was moving in the right direction (table "Are the events in Ukraine developing in the right or wrong direction?...").

After the beginning of resistance to the Russian invasion in Ukraine, according to the Razumkov Centre public opinion polls, the share of those who believed that events were developing in the right direction constantly increased, reaching its maximum at the end of the winter of 2023, when expectations of quick victories of the AFU and liberation of the country from the invader were high.

Are the events in Ukraine developing in the right or wrong direction? % of responses

However, later, especially in the summer of 2023, a decrease in this indicator was observed — to 52% in July, that is, to the level observed in the fall of 2022, when the mood and expectations of Ukrainians and their assessments of development, although very positive, reflected high risks of escalation, and fell to less than 49% in August–September (the lowest in a year), when it became clear that the country's liberation is not in sight yet (accordingly, the share of those who believed that the country was moving in a wrong direction increased significantly — from 21% in winter to more than 30% in September 2023) (see Table "Correctness of the direction of developments in Ukraine in the 2^nd quarter")

Correctness of the direction of developments in Ukraine in the 2^nd quarter, % of responses

Meanwhile, despite the decrease of the relevant indicator in the summer months, almost half of the respondents remain optimistic and are convinced of the correctness of the country's movement (less than a third of respondents share pessimistic assessments).

(2). Along with Razumkov Centre's research, a number of surveys regarding assessments of the current economic state of enterprises and immediate prospects in the country have been released recently. Let's take a look at the results of a survey of expectations of industrial enterprises in 2023 regarding the prospects of their business activity, presented by the State Statistics Service of Ukraine. Of course, the focus of the two mentioned surveys is different — the perceptions and feelings of "ordinary" citizens (households) and (managers) of industrial enterprises may well differ, which affects the comparison between their results. However, such surveys still provide an opportunity to assess the current processes in the country from different viewpoints.

The index of the business climate in industry, which improved in January-May, 2023, showed a decrease in the summer months, and fell in September, compared to July 2023, by 0.4 percentage points, to minus 0.1% (table "Expectations of industrial enterprises regarding their current business activity"). At the same time, the value of the Business Confidence Index, while staying negative, shows a weak upward trend.

Expectations of industrial enterprises regarding their current business activity, % of responses

That is, one can see deterioration in the estimates of the current state and prospects of households and businesses. Downward trends in the assessment of the business climate in the conditions of continued hostilities are especially "unpleasant". This may indicate the government's return to the practice of toughening controls in the economic sphere, although it’s the best time to encourage business activity, primarily in industry, which mainly works for the victory.

(3). The next important question largely characterizes not so much the current assessments by citizens but expectations of changes in the near future — within three months. It is about the households’ expectations of changes in the business environment, which is most often connected with the expectations of changes in their own well-being. Usually, estimates of changes in one's well-being are somewhat higher than estimates of the economic situation in the country as a whole. A look into the near future is usually associated with the trend and dynamics of the country's development.

On the other hand, there is also a certain contradiction regarding the nearest period. While estimates of the correctness of the country's movement show a tendency to worsen (the table above "Correctness of the direction of developments in Ukraine in the 2^nd quarter"), assessments of the nearest changes of the business situation in the country show positive expectations (Table "How will the economic situation change in Ukraine in the next three months?"), and the balance of responses in September reached record high in 2023. Such a difference in dynamics may be caused by the fact that citizens are increasingly concerned about social and political problem areas, and not just survival in the wartime period. That is, the expectation of an economic improvement does not overshadow the negative manifestations of the present in the social and political spheres, which can complicate the prospects of economic recovery.

How will the economic situation in Ukraine change in the next three months? % of responses

At the same time, individual indicators of expectations of industrial enterprises are of a mixed character. Say, expectations of the volume of production in the next three months in industry in September 2023 amounted to +11%, which was quite a high value, but at the same time, the risks of reducing the number of employees remain significant. In general, the assessment of the future development of the business situation in the country remains practically unchanged (the table "Expectations of industrial enterprises regarding the prospects of business activity"). The value of the Business Confidence Index, while remaining negative, shows a weak positive trend.

Expectations of industrial enterprises regarding the prospects of business activity (in the next three months), % of responses

This allows us to state that although the assessments of the authorities' support for economic activity have worsened, in the short run, business remains optimistic and sees opportunities for growth. Meanwhile, there are reasons to argue that the implemented economic policy should be clearer for entrepreneurship.

A clear statement of social goals and confidence in the correctness of the country's movement will contribute to the growth of social optimism and economic capacity, and thus to a significant improvement of expectations regarding Ukraine's ability to eventually overcome the existing problems and difficulties.

https://razumkov.org.ua/komentari/riznospriamovani-ochikuvannia