State boosts economic outook based on lower inflation

Hawaii’s economy will grow slightly faster than previously thought this year and next thanks largely to the lack of any significant inflation, according to a state forecast released today.

The state Department of Business, Economic Development and Tourism ratched up its estimate inflation-adjusted economic growth to 2.6 percent for 2013, up from the previous forecast of 2.4 percent delivered three months ago. The projection for 2014 was revised up to 2.4 percent from 2.3 percent.

“We continue to be sanguine over the prospects for our economy as the state’s third quarter results have validated our previous forecasts of economic growth,” said Richard Lim, DBEDT director.

DBEDT expects the Honolulu Consumer Price Index, a proxy for inflation, to rise 1.9 percent in 2014, lower than the 2.3 percent previously forecast.

Following strong growth in visitor arrivals last year, DBEDT projects that overall visitor arrivals will increase by 4.3 percent in 2013, unchanged from the previous forecast. Visitor spending is projected to increase 5.3 percent in 2013. 0.3 percentage points below the previous forecast.