Hawai'i's economy is expected to continue to moderate this year and into 2008 amid a dip in tourism, state economists predicted yesterday.

Personal income, total wage and salary jobs, and state gross domestic product are all forecast to increase, although below the unusually high growth rates experienced during the previous few years, according to the latest quarterly economic forecast released by the Department of Business, Economic Development and Tourism.

Continued sluggishness this year in international tourism will cause a slight decline in total visitor arrivals for 2007, despite continued growth in the domestic visitor market. Visitor arrival growth is expected to return in 2008.

"We continue to see sustained growth in jobs and income and some moderation in the rate of inflation, despite the softening in international visitor arrivals," said DBEDT Director Ted Liu.

DBEDT now expects a slight 0.3 percent decline in total visitor arrivals in 2007. During the first half of the year visitor arrivals fell 1.6 percent. In addition, projected 2008 visitor growth has been lowered a half-percentage point to 1.5 percent. As late as the May forecast, visitor arrivals were expected to show a 1 percent increase for 2007.

Meanwhile DBEDT's forecast for real personal income growth remained unchanged at 1.8 percent in 2007 and 1.9 percent in 2008.

The agency's forecast for Honolulu's Consumer Price Index is also unchanged at 4.5 percent for 2007 and 3.8 percent for 2008. Honolulu's inflation rate is expected to moderate to 4.5 percent this year and 3.8 percent in 2008 after hitting a 15-year high of 5.9 percent in 2006.

The 2007 forecast of wage and salary job growth in 2007 has been raised to 2.0 percent, up somewhat from the 1.8 percent forecast in May. This is based on a better-than-expected 2.1 percent job growth in the first half of the year.

The job-growth forecast for 2008 remains unchanged at 1.5 percent. Job growth has been particularly strong in professional and business services, construction, the health sector and government activities.