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State says economy growing faster than previously thought

By Star-Advertiser Staff and News Services

LAST UPDATED: 10:18 a.m. HST, May 9, 2012

Continued strength in the visitor industry this year will boost Hawaii’s economic growth at a faster rate than previously thought, state officials announced today.

The state Department of Business, Economic and Development and Tourism revised upward its forecast for visitor arrivals, spending, as well as overall economic growth for 2012 and 2013.

“We remain optimistic and confident that our economy is moving toward a more normal growth curve, said Richard Lim, DBEDT director.

Gross domestic product, the broadest measure of the state’s economic perfrmance, is forecast to expand by 2.2 percent this year and 2.3 percent in 2013 after adjusting for inflation. Those figures were revised up from growth rates of 1.8 percent and 2.0 percent published in the last quarterly forecast issued in February.

Visitor arrivals are expected to hit a record 7.7 million this year, up 6.5 percent from 2011. DBEDT has previously forecast a 4.4 percent annual increase.

The forecast calls for visitor spending to grow by 9 percent to 13.9 million, another record. DBEDT in February forecast a 6.4 percent increase in visitor spending.

Another positive economic indicator is personal income. DBEDT revised its forecast of inflation-adjusted personal income growth to 1.7 percent in 2012, up from the previous forecast of 1.2 percent growth.

On the downside, however, the hotter economy will mean a pickup in inflation. The consumer price index for Honolulu is expected to average 3 percent in 2012, up from the 2.8 percent rate forecast in February.

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