Economic growth in the current fiscal year is expected to remain steady but could slow down due to uncertainties over looming military action in Syria, a potential federal government shutdown and impact of the Affordable Care Act on small businesses, state economists said Thursday.
Although a specific numerical forecast from the state Council on Revenues was awaiting final calculations, the panel’s new chairman said the overall tenor of discussions indicated a conservative approach for the coming year.
"There’s a lot of uncertainty right now with many things — with tourism, with the war (in Syria), with federal policies, sequestration," said new Council on Revenues Chairman Kurt Kawafuchi, state tax director under former Gov. Linda Lingle. "So I think Council is trying to be conservative.
"There’s a lot of unknown factors."
Kawafuchi said the final forecast is expected to be down "slightly" from the forecast of 8 percent growth predicted in May.
The council in May also had predicted 6.7 percent growth for the 2013 fiscal year that ended June 30, but preliminary calculations indicate the final take for 2013 was about 9.9 percent growth, or about $100 million more than originally forecast, Kawafuchi said.
For the current year, despite strong growth in the construction sector, including the boom in high-rise construction projects in Kakaako, growth is expected to be tempered by reduced visitor spending and the impact of the lingering economic recession beyond Hawaii.
Higher room rates, exchange rates and air fares appeared to be slowing visitor spending, economists argue.
The Council on Revenues forecasts the amount of state tax collections expected in the current fiscal year and beyond.
The forecast is used by the governor and state lawmakers in determining the two-year budget and the supplemental budget.