Hawaii can look forward to moderate growth in the next few years but Japan's economy likely will continue to tread water, a state economist said today. Moderate growth forecast
for isle economy
By Dave Segal
dsegal@starbulletin.comPearl Imada Iboshi, speaking at a Central Pacific Bank-sponsored economic forum at the Pacific Club, forecast visitor arrivals in 2003 to rise 6.3 percent from a projected 3.5 percent gain this year and said nonagricultural job growth, which in October had its first positive month in 2002, should increase 1.4 percent in 2003 from a 0.2 percent decline this year.
"(Visitor arrivals are) still down significantly from 2000 in terms of September and October but we're looking to go back to somewhere close to 2000 levels," she said. "We're expecting for the next few months to see increases of 30 percent and that will bring us positive for the year. But it's been a bit slower than we expected."
Iboshi also said maintaining market share of Japan tourists will be important for the state since many Japanese are now opting for shorter travel destinations such as South Korea, China, Thailand and, before the terrorist attack, Bali.
She also forecast inflation to stay mild, growing 1.5 percent in 2003 from a projected 1.2 percent increase in 2002. Iboshi projected personal income growth to rise 3.5 percent next year from 3.1 percent this year with real personal income growth, which is adjusted for inflation, to remain at 1.9 percent in 2003 for the second straight year. She forecast the real gross state product to stay at 1.7 percent for the second year in a row.
Meanwhile, Mark Kawakami, a market strategist for ING Advisors Network, said at the same forum that the U.S. economy is on the mend and that the investment market is attractive. However, he said, it's time for corporations to carry the ball for consumers who have been holding up the economy.
"I think the consumer spending driver is long in the tooth and I think there will be a replacement relative to business capital spending," said Kawakami, who said the consensus gross domestic product growth for 2003 is between 3 percent and 4 percent.
"American companies are about as lean as they could possibly get to this point with cost cuts and layoffs, and they've also reined in business spending. Everyone's been playing defense. At this point in time, if you're going to get earnings growth capacity, you're going to have to do it on the top line (revenues). That's going to involve capital spending."
