ECONOMY

Benefits from price cuts expected in May

Development Minister Costis Hatzidakis said yesterday an agreement with the country’s main supermarkets to reduce their prices is expected to have a favorable impact on inflation as of May. «I repeated (in talks with supermarkets) that it is a year of national and social responsibility and, as part of this, we invited them to cut prices,» the minister told reporters after the meeting. The extent of the price cuts will depend on each supermarket and their pricing policy but will affect basic consumer products, the minister added. Greece’s consumer inflation decelerated to an annual pace of 1.6 percent in February, its lowest level in 40 years. Meanwhile, a study by the Foundation for Economic and Industrial Research (IOBE), a nonprofit research group, showed yesterday that Greece’s food and drinks industry is showing resilience against the global crisis. Production in the country’s food and drinks sector rose 1.2 percent last year versus a 4.2 percent drop in the broader manufacturing industry. Investments in foodstuffs and drinks fell 23 percent last year but prospects for 2009 are improving. «For 2009, initial forecasts are also negative but to a lesser extent, as a 3.3 percent drop is also expected in comparison to 2008,» IOBE said in a statement.