State revises economic growth forecast lower
Advertiser Staff
Hawai'i's $61.8-billion economy will grow at a slightly lower rate than previously forecast this year and next, according a new forecast from the state Department of Business, Economic Development and Tourism.
The forecast calls for the economy to grow by 2.5 percent when inflation is accounted for, or lower than the 2.8 percent the state had been expecting.
The lower projection was driven by several factors, including higher-than-expected inflation and tourism counts that are expected to decline this year. The state's forecast for visitor arrivals calls for a 1.4 percent decline this year given continued sluggishness in air travel coupled with NCL America pulling two cruise ships out of interisland cruises.
Previously the state had thought visitor arrivals would grow by 1 percent this year, reversing a 0.8 percentage decline that occurred in 2007.
"We still expect continued job growth in professional and business services, construction, food service and health services that should counter weakened visitor activity," said Theodore E. Liu, DBEDT director, in a press statement.
"As a result, we continue to forecast moderate economic growth during the next few years."
Other revisions in the forecast include:
The state also lowered its economic growth projection for next year in lowering visitor arrival expectations for 2009.
It now expects the economy, as measured by gross domestic product adjusted for inflation, to increase 2.5 percent instead of 2.7 percent.
