It's time to look ahead as 2006 comes to a close. In the past year we've endured a roller-coaster ride with oil prices and gasoline price caps. There's been pineapple operations shuttered and new airlines roiling the interisland skies with low airfares.

Next year is certain to be filled with surprises, but there are some short-term economic and business events that may be predicted. The Internet will continue to become more integral to people's lives, changing shopping and media habits. Oil prices will gyrate.

Hawai'i's Neighbor Islands will continue to gain in economic importance, while the housing market may cool after a remarkable several-year run. The high cost of living here will rise, as will some wages.

Here's some prognostications on what the New Year will bring, including the inane, good and bad.

1. HAWAI'I'S ECONOMY

It happens to all economies. Hot ones eventually cool and growth slows. That's what's projected for Hawai'i, which has had a few can't-get-better-than-this years recently, with low unemployment and tax revenues surpassing expectations. The party isn't exactly over, but there's a general agreement that 2007's economic growth will be lower than 2006's. The state Department of Business, Economic Development and Tourism forecasts real gross domestic product growth (economic growth adjusted for inflation) for Hawai'i will fall to 2.4 percent from an estimated 3.3 percent this year.

What it means for you: 2.4 percent real economic growth is nothing to cry about. It's a respectable gain.

2. AIRLINE MERGERS

The spate of proposed airline mergers could actually yield a consolidation or two. Take your pick of Mainland carriers: Continental, Delta, United and US Airways. They have all been mentioned for potential mergers. Industry watchers say don't be surprised if American and Northwest get in on the craze.

What this means to you: Experts say merged airlines could trim flights and boost airfares nationally. It remains to be seen if the merger frenzy will touch local players Aloha, Hawaiian and Mesa airlines.

3. LONGS DRUG CHALLENGE

Longs Drug Stores' enviable position in the hearts and pocketbooks of longtime Hawai'i shoppers will have perhaps its stiffest direct challenge as Walgreen Co. moves into the state with at least two locations. Walgreen is the nation's biggest drug store chain with greater buying power than Longs, a major regional drug store chain.

What this means for you: Walgreen is opening a store across a parking lot from Longs in Kane'ohe. Watch for grand opening discounts as the chain introduces itself to the state.

4. GENERAL EXCISE TAX

Like it or not, the state's general excise tax is being bumped up by 0.5 percentage points come New Year's Day on O'ahu. with the extra proceeds going to fund a mass-transit system. The rate will jump from 4 percent to 4.5 percent, with businesses being allowed to raise what they charge customers from 4.16 percent to 4.71 percent.

What it means for you: If you spent $10,000 on goods this year, you probably paid $416 in general excise tax. Your tax will go up to $471 with the same purchases next year, a $55 increase. Beyond this, expect confused shoppers trying to figure out why they're paying more at the check-out stand.

5. INTERISLAND FARE WAR

The entry of Mesa's go! into the interisland air market in June has been great for consumers, with Aloha and Hawaiian airlines being forced to match some of the new rival's promotional discount offerings. Look for intermittent skirmishes as the carriers try to wrestle passengers from one another.

What it means for you: More savings if you are nimble enough to book one of the discount fares. But don't get too used to it. At some point airline owners are going to tire of losing money, or their balance sheets won't let them offer the low fares anymore.

6. TOURIST ARRIVALS

Things aren't great, but they're not too bad for the U.S. and Japanese economies. The state Department of Business, Economic Development and Tourism is forecasting moderate gains for each economy next year. That means good things for Hawai'i's tourism industry. The state economic agency is projecting visitor arrivals will rise 2.5 percent while their expenditures will climb 6 percent.

What it means to you: Like it or not, tourism is the state's biggest industry and its gains feed into employment and taxes. That keeps people employed and the state's economic wheels turning.

7. ALOHA, TARGET

Target Corp., the retailer who brought designer flair to discount retailing, may finally announce its expansion into Hawai'i. It's been almost a year since the Minneapolis-based chain confirmed it was interested in coming to O'ahu and the Neighbor Islands if suitable real estate was available. Target, never one to say too much, currently operates in 47 states.

What it means to you: Michael Graves-designed household items, Isacc Mizrahi clothes and fewer trips to Wal-Mart.

8. UNFUNDED LIABILITY

Hawai'i's lawmakers may be in for some unpleasant news. Already the Employees' Retirement System has said more money is needed to fund state and counties' pension promises to workers. Lawmakers probably will have to deal with another vexing "unfunded liability" issue in promised medical benefits for government retirees. Some people say this liability could run into the billions of dollars and needs to be dealt with.

What it means to you: A lot of discussion at the state Legislature about how much of your tax dollar is used to pay these liabilities down.

9. INFLATION

Honolulu's inflation rate rose at the fastest clip in the nation during the first half of 2006. The University of Hawai'i Economic Research Organization forecasts full-year inflation will top 5 percent. UHERO is projecting 2007 will see inflation of more than 4 percent. The state Department of Business, Economic Development and Tourism's forecast is for 3.7 percent.

What it means to you: Inflation can have pernicious affects, cutting into consumers' buying power if wage increases don't keep pace. UHERO is forecasting wages won't keep up with inflation in the near term.

10. HOME PRICES

The breathtaking increase in housing prices was showing signs of fatigue as 2006 came to a close. Nationally, there are worries about a plunge in residential prices. Locally, the University of Hawai'i Economics Research Organization is projecting a low single-digit percentage decline in housing prices next year. Bank of Hawaii chief economist Paul Brewbaker in a recent report noted there may be lower housing sales volume through the remainder of the decade.

What it means to you: If you want to get into the housing market here you are getting a slight break. if you are selling, it may mean lower price expectations. Inventory will probably sit on the market longer than it did two years ago.

11. MINIMUM WAGE HIKE

Hawai'i's minimum wage will rise to $7.25 an hour from $6.75 an hour come Jan. 1. Hawai'i is one of 16 states nationwide where the wage floor is higher than the federal minimum wage of $5.15 a hour. The new Democratic leadership in Congress is vowing to raise the federal rate during its first 100 hours of business next month.

What it means to you: The increase works out to a 7.4 percent hike, which could arguably find its way into the cost of some goods and services. Opponents of such raises argue employers may cut back on workers to deal with higher costs, and that employment growth will come more slowly. But in reality, employers are having a tough time finding workers for what jobs they have, with Hawai'i's unemployment rate among the lowest in the country.

12. HAWAIIAN TELCOM TELEVISION

It didn't happen this year as anticipated. But Hawaiian Telcom wants to start offering a television service over its telephone lines and hopes to launch its video business in the second half of 2007. It's all part of a world in which Time Warner Oceanic Cable can offer telephone and Internet service over its cable lines, while new technology is allowing telephone companies to get into the television business.

What it means for you: Possibly lower prices for O'ahu consumers where the service would be available. In other areas where both cable and telephone companies compete, prices are lower and more channels are offered, according to one study.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.