Growth and industrial production are slowing down, few jobs are being created and there is a general climate of malaise and diminished expectations, the Foundation for Economic and Industrial Research (IOBE) points out in its quarterly survey of the Greek economy. But all these developments were to be expected after the 2004 Athens Olympics, whose benefits will be longer-term than anticipated, the survey says. On the plus side, IOBE, which is closely connected to the Federation of Greek Industries (SEV), says the government is finally implementing its economic policy, in which priorities are «specific and clearly spelled out.» An example is the new law on working hours, which the survey considers a step forward from previous legislation that saddled employers with unnecessary costs. IOBE says the economy will grow between 3 and 3.3 percent in 2005, compared to 4.1 percent growth in 2004, and well below the initial government estimate of 3.9 percent. The final figure «will crucially depend on how steep the slowdown in investments and consumption will be,» the report says. While consumption is expected to hold on, once again thanks to consumer credit expansion, the report is not so upbeat on investment. Pointing out that public investment has been significantly reduced and that industries are also reducing their investment, the report points out that, if investment does not pick up in the second half to surpass the already meager 2004 level, then even a forecast for 3 percent growth would seem risky. There are certain signs of such a pickup, especially in the construction sector, with the report also hoping last year’s law on investment incentives will actually begin to bear fruit. With industrial production in decline, it is hardly surprising that employment is growing at «a far smaller pace» than during previous years, the report remarks. Investment in manufacturing will decline at a sharper pace than previously thought. The survey considers that average inflation, although higher than last year, may not in the end exceed 3.5 percent, provided no more indirect taxes are imposed, like the VAT hike put in effect in April. A great deal will depend on the price of oil. Yesterday, the National Statistics Service (NSS) announced that consumer inflation rose at an annual pace of 3.9 percent, the highest level in six month. NSS general secretary Manolis Kontopyrakis attributed part of the rise to oil prices, adding that if there was no big price hike, inflation would fall to 3.5 percent at the end of August, thanks partly to the retail sales period.