That means personal income, total wage and salary jobs will increase this year but at slower rates than in recent years, according to a quarterly economic forecast released today by the Department of Business, Economic Development and Tourism.

The state department expects visitor arrivals to increase 1.4 percent this year, following an essentially flat year for visitor arrivals in 2006. Meanwhile, Honolulu's consumer price index is forecast to increase 4 percent this year, following a 5.9 percent spike in 2006. In 2008, Honolulu's cost of living index is expected to rise 3.4 percent.

That increase in living expenses means that inflation-adjusted personal income will grow 1.9 percent this year, according to the department. Real income growth was just 0.5 percent in 2006.

"Positive growth in employment, personal income, and tax collections in the fourth quarter of 2006 are indicative of a continuing broad-based expansion of Hawai'i's economy," according to the report. "The growth rates in many areas, however, have slowed compared to the previous two years."

Total wage and salary job growth is expected to be 1.8 percent in 2007 and 1.5 percent in 2008.

Hawai'i real GDP is predicted to increase 2.7 percent in 2006 and 2.6 percent in 2007.

The department forecasts are based on the latest trends of growth for Hawai'i's economy, as well as those for the U.S and Japanese economies, the two economies most influencing Hawai'i.

A moderating economy caused state officials to revise downward 2007 estimates for economic growth in several areas.

Here are elements of the current forecast for 2007, with previous forecast percentages (Nov. 22, 2006) in parentheses: