Hawaii forecasting gradual economic recovery

State officials are predicting the national recession and sharp decrease in visitor expenditures will have a smaller impact on Hawaii's economy this year than previously forecast.

The Department of Business, Economic Development and Tourism's latest quarterly report, released Monday, predicted a 1.1 percent decline in Hawaii's 2009 real gross domestic product, down from a 1.6 percent decline forecast last quarter.

"Our forecast for this period shows a more gradual decline," department Director Theodore Liu said. "We do not believe it is prudent to predict an economic recovery yet, and all indications are that any recovery will be gradual."

The state's economy is expected to stabilize in 2010 with a modest 1.2 percent growth in visitor arrivals and real GDP rising 0.4 percent, the report said.

"Assuming continued improvement in national and international economic conditions, modest growth in the state's economy is forecast to return by 2011," it said.

Visitor arrivals in 2009 are expected to decline 5.9 percent, same as the previous forecast in May.

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However, the department believes visitor expenditures will decrease 11.5 percent, a significantly steeper decline than the 7.9 percent drop projected in the previous forecast.

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The May forecast projected a 3.4 percent decline in total visitor days, while the latest report forecasts a decrease of 5.8 percent.

"In light of job declines in the first two quarters of 2009 and the lower forecast for visitor expenditures and visitor days, the state now expects total wage and salary jobs to decline 3 percent in 2009. This is down from a 2.1 percent decline projected in the previous forecast," the report said.