Things looking up
for isle economy

Experts predict better times unless
there is a war or more terrorism

---

By Richard Borreca
rborreca@starbulletin.com

State economists are predicting slow but steady growth for Hawaii's economy, but, they warn that war with Iraq or another terrorist attack in the United States would slow that recovery.

The predictions were released this morning as economists briefed the state Legislature's money committees before they start work on a new state budget.

Glenn Ifuku, director of the Research and Economic Analysis Division of the state's Department of Business and Economic Development and Tourism, told lawmakers that Hawaii is slowly climbing back.

"The path of economic progress was marked both by pleasant surprises and unfulfilled hopes. It was a year of steady recovery in some sectors and unyielding inertia in others," Ifuku said about the 2002 economy.

The economy slowed last year because of a nation-wide recession, with less vigorous growth than usual, he said. The economy was also hurt by the continuing recession in Japan.

But, he added, the state is now expecting a gradual turn around.

"Based on the rate of increase in visitor arrivals that we are already seeing, we are projecting a 6.1 percent increase in visitor arrivals in 2003 over the reduced level of 2002," Ifuku said.

That should bring the state "moderate levels of growth" in both jobs and personal income, according to Ifuku.

Paul Brewbaker, who is vice chairman of the state's Council on Revenues and chief economist for Bank of Hawaii, told legislators this morning that even with the U.S. recession and the 2001 terrorist attacks, real personal income in Hawaii has increased for the past five years.

"Despite the Asian crisis, global financial turbulence, economic contractions overseas and geopolitical shocks, Hawaii's economy has been resilient," Brewbaker said.

The state Council on Revenues sets the economic forecast, which legislators and the governor use to plan state government spending.

The council's most recent prediction is for a 6.1 percent increase in tax collections.