DBEDT lowers forecast for Hawaii economic growth

The state sharply lowered its forecast for 2009 visitor expenditures and for the state's growth due to expectations that the national recession will continue to affect Hawaii's economy. Visitor expenditures are now expected to decline 7.9 percent to $10.4 billion. In February the forecast was a 1.9 percent drop, according to the Department of Business, Economic Development & Tourism.

DBEDT now expects a 1.6 percent decline in this year's real, or inflation-adjusted, state gross domestic product. Previously, the department projected a 0.2 percent decrease. In current dollars, the state expects Hawaii's GDP to rise 0.1 percent to $63.5 billion.

In addition, DBEDT lowered its forecast for total wage and salary jobs to a negative 2.1 percent — 612,400 jobs — from minus 1.3 percent. DBEDT maintained its projection for total visitor arrivals — a 5.9 percent decline to 6.4 million people — but said that it now envisions total visitor days declining 3.4 percent compared with its previous forecast for a 4.4 percent decline.

The good news was inflation, as measured by the Honolulu consumer price index, is expected to rise only 1.2 percent, which is half the rate forecast previously. However, the forecast for personal income growth was just 0.1 percent. When adjusted for inflation, real personal income would actually decrease 1.1 percent.

The state expects the economy to stabilize in 2010 while inflation remains low as the Honolulu consumer price index increases just 1.5 percent. "Assuming continued improvement in national and international economic conditions, modest growth in the state's economy is forecast to return by 2011," the report said. "That gradual pace of recovery should continue in 2012, barring unforeseen events," the report said.