Hawaii’s economy is expected to grow faster this year than previously forecast after inflation remained mild during the first six months of 2014.

The state revised upward its growth forecast on Wednesday and projects Hawaii’s inflation-adjusted gross domestic product, the broadest measure of economic output, to rise 2.6 percent  this year, up from 2.4 percent in its May forecast, according to a quarterly report released by the state Department of Business, Economic Development & Tourism.

Honolulu inflation for the first six months of 2014 was up 1.1 percent over the year-earlier period and the state now expects inflation to be up 1.5 percent this year, which is lower than the 2.1 percent projected in its earlier forecast.

Hawaii’s real (inflation-adjusted) personal income growth also was revised upward. The state now expects it to rise 2.6 percent, up from 2.1 percent in its May forecast.

Visitors arrivals and spending are still forecast to hit a record for the third year in a row. The state said although visitor arrivals were down 0.5 percent during the first half of this year, a 5 percent increase in air seats during the second half of the year should result in 8.2 million visitors, up 0.7 percent from 2013, and $14.9 billion in spending, up 2.6 percent from last year. DBEDT’s higher forecast comes despite Tropical Storm Iselle and the threat of Hurricane Julio resulting  in 13,500 visitor reductions for Aug. 7 and 8.