A widespread global recession is expected to further drive down Hawaii tourism in 2009, according to a new report by the University of Hawaii Economic Research Organization.

The latest UHERO Global Economic Forecast predicts the financial crisis will cause the deepest slowdown of global growth since 1991, expected to pull virtually all of the rich countries into recession next year, while stalling the growth of developing nations.

The recessionary concerns come as Hawaii's lead industry struggles to capture more market share from competing destinations, also suffering from a global decline in consumer spending.

Growth in real gross world product—the broadest measure of global economic activity—is forecast to slow to 2.5 percent this year and 1.1 percent in 2009, down from a 3.7 percent rate in 2007.

“;All of Hawaii's tourism markets are going through recession at the same time,”; said UHERO economist Byron Gangnes. “;Unfortunately, there is no strong part of the world to market to right now.”;

The state's ailing visitor industry will be increasingly challenged by the depth and duration of a U.S. and Japan recession, the report said.

U.S. gross domestic product for 2008 is expected to grow by 1.4 percent and to drop by 0.8 percent in 2009, while substantial job losses is predicted to continue into 2009 with unemployment peaking at 8.5 percent at the end of next year.

Meanwhile, Japan's gross domestic product growth is forecast at 0.3 percent this year and is expected to contract by 0.5 percent in 2009.

“;A year ago, it wasn't clear we were headed into a widespread global slowdown,”; Gangnes said. “;We knew the U.S. was in bad shape, and now it's clear the whole world is being negatively affected by the financial crisis.”;

The report also anticipates weaker performance from developing Asian markets, such as Korea and China—both areas Hawaii tourism officials had hoped would help offset other declining visitor segments.

South and East Asian economies are anticipated to slow to 3 percent to 4 percent in 2009, while China is expected to decline to below 10 percent this year and 8 percent in 2009, from more than 11 percent growth in 2007.

“;There was some hope that strength in non-American markets, in particular Canada and Europe as well as developing Asian countries, would help to stabilize the local tourism industry,”; Gangnes said. “;At this point, it is clear that that's not going to be the case.”;

UHERO expects to release its fourth-quarter economic forecast next week, which will be clearly more negative than earlier reports this year due to the state's weak tourism industry, he said.

The silver lining for Hawaii is lower oil prices, driven in part by the weak global economy and the fact that the yen has strengthened, which could help increase spending by Japanese visitors, Gangnes said.