While the assessment of the current situation again worsened slightly, leaving it almost as bleak as in 2002, business expectations picked up marginally from their exceptionallylow level in November and December. An improvement in business expectations is essential if the economy is to stabilize – particularly in the wake of last fall’s convulsions. It is encouraging that both the situation and expectations in the retail sector have improved somewhat. Concerns that uncertainty about the economic crisis would cause consumers to rein in spending drastically are thus fading. Rather it now seems that purchasing power gains on the back of declining commodity and food prices are buoying sentiment among shoppers. This year private consumption could well make a key contribution to the economic turnaround.