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Is Hawaiʻi nearing a recession? Analysts say not quite

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AP Photo/Caleb Jones
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Hawaiʻi is running at 6.6% now — of which 4.1% is core inflation. That, combined with rising interest rates, is changing the dynamics between lenders and consumers.

Pacific Business News's recent money and finance roundtable gathered bankers, credit union leaders and an economist for a look into how Hawaiʻi is doing.

Paul Brewbaker, economist and principal of TZ Economics, said that inflation in Hawaiʻi is running at 6.6% now — of which 4.1% is core inflation. That, combined with rising interest rates, is changing the dynamics between lenders and consumers.

Andrew Rosen, president and CEO of Hawaiʻi State Federal Credit Union, said that higher interests rates have increased the credit union’s profitability. At the same time, it has seen declines in mortgages and refinances as consumers back away from expensive borrowing.

It’s an environment that favors savers, who can earn more interest, but deters borrowers.

Greg Young, president and CEO of HawaiʻiUSA Federal Credit Union says interest rates on mortgages are now 7%. He also notes that auto loans have decreased, but consumer debt has been rising as people cope with inflation by putting more of their spending on credit cards.

Is Hawaiʻi in a recession?

Looking at the numbers for recent years, Brewbaker said the question should be, “When were we not in a recession?”

Nevertheless, our panelists agreed that, as tourism has recovered, Hawaiʻi’s economic fundamentals look relatively sound.

On Wednesday, the state Department of Business, Economic Development and Tourism released updated projections of 2.6% growth this year and 1.7% next year — far better than the overall GDP growth projected for the United States, which is just two-tenths of one percent.

A. Kam Napier is the editor-in-chief of Pacific Business News.
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