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State sees rebound in 2011


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POSTED: Saturday, February 28, 2009

Hawaii's declining economy is not likely to show even modest growth until 2011, although stabilization may begin late this year or next, according to a downward revised quarterly forecast issued yesterday by the state Department of Business, Economic Development and Tourism.

               

     

 

HAWAII'S ECONOMIC FORECAST

       

       

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
CATEGORY2009 FORECAST2010 FORECAST2011 FORECAST
GDP0.2% decline1.1% increase1.6% increase
Job count1.3% declineFlat0.5% increase
Tourism5.9% decline1.3% increase4.6% increase
Income0.4% decrease0.6% increase1% increase

       

 

       

        Source: Department of Business, Economic Development & Tourism
       

 

       

Hawaii's gross domestic product will shrink in 2009 along with visitor arrivals, jobs and real personal income. In fact, the only economic indicator expected to rise is inflation, but that too has been throttled back as a result of the poorly performing economy.

“;National and international economic conditions continue to slow Hawaii's economy and this will likely be the case for most of 2009,”; said DBEDT Director Theodore Liu. “;We are hopeful of a turnaround beginning late this year, but recovery is likely to be a gradual process.”;

The department now expects a 0.2 percent decline in the state's 2009 gross state domestic product as well as a 1.3 percent decline in the average job count for the year. Likewise tourism arrivals, which have been dropping sharply in response to the global financial crisis and U.S. economic recession, are expected to fall 5.9 percent in 2009 along with real income, which could drop by .4 percent. However, Honolulu's CPI, a proxy for inflation, is expected to rise just 1.2 percent in 2009, about half the rate expected in the previous forecast.

“;For the economy to begin recovering in Hawaii, we need to start seeing more consumer confidence and people traveling and spending money again,”; said state economist Pearl Imada Iboshi.

DBEDT anticipates that Hawaii's economy will stabilize in 2010 because the U.S. economy appears to be recovering and further improvements are expected as President Barack Obama's stimulus package moves money through the economy, Imada Iboshi said.

The state agency anticipates 1.1 percent growth in GDP, 1.3 percent growth in visitor arrivals and a slight .6 percent increase in real personal income next year. The net job count, however, is likely to remain flat in 2010. Inflation will remain low with the Honolulu CPI increasing just 1.5 percent.

If national and international economic conditions continue to improve, Hawaii should see modest economic growth in 2011, DBEDT said. GDP is forecast to rise by 1.6 percent in 2011 as visitor arrivals rise 4.6 percent, real income rises by 1 percent and the state's job count improves by .5 percent.