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The Honolulu Advertiser

Posted at 12:03 p.m., Thursday, September 14, 2006

Inflation cuts local purchasing power

Advertiser Staff

Prices in Hawai'i are rising at a faster rate than previously thought, eroding consumers' purchasing power and contributing to a slowdown in economic growth, a group of University of Hawaii economists said today.

The inflation was 6 percent during the first half of this year, the highest in the nation, according to a quarterly report issued by the University of Hawaii Economic Research Organization. That prompted UHERO to revise its full-year inflation estimate up to 5.2 percent from its previous estimate of 3.8 percent issued in May.

"Inflation in Hawai'i has reared its ugly head," the economists wrote in the report. "Rising prices are cutting into the purchasing power of local residents and will lead to a sharp drop in measured real income growth this year."

Inflation-adjusted personal income growth if forecast to slow to 1.0 percent this year after increases of 3 percent in 2005 and 4.6 percent in 2004.

The report also forecast a continuing slowdown in the growth of visitor arrivals. Arrivals are predicted to rise by 1.5 percent this year, after rising by 6.4 percent in 2005 and 8.3 percent in 2004.

Cousteau to take part in Big Island 'eco-hotel' development

Developer Sea Mountain Five LLC is partnering with environmentalist and ocean explorer Jean-Michel Cousteau in planning a 434-acre resort complex in Punalu'u on the Big Island, the developer announced today.

The project, which is pending the approval of an environmental impact statement and a special management area permit, will include a 300-room "eco-hotel," marine conservation, education and Hawaiian cultural center, coastal preservation and recreation zone and programs. It will also include a renovated golf course, up to 1,500 single-and multi-family residences, and retail and commercial areas.