The new administration under President Joe Biden has shown improved chances of curtailing the COVID-19 pandemic that has led to predictions of economic recovery for Hawaii.
With Biden focusing a stronger rollout of the vaccine and testing, optimism has taken hold for economic growth in Fiscal Year 2022. Expectations have been placed in the form of a 6.5% increase as predicted by the Council of Revenue. That is welcomed news as the state is expected to generate nearly $6.3 billion in tax revenue for the current fiscal year that ends Wednesday, June 30. This represents a 6.5% decrease from the previous year that ended in June 2020 but falls short of earlier forecasts, the Star Advertiser reported.
“The economy has been performing substantially better than the council forecast,” council member Carl Bonham, executive director of the University of Hawaii Economic Research Organization, said.
Underlying reasons for optimism include the disbursement of the vaccine which will make travel safer in turn feeding the state’s tourism industry. Job creation is also on the rise with 40,000 people gaining employment in November 2020.
With numbers starting to tick forward, the state is hopeful of getting back on track. Even with improvements, the fact is the COVID-19-induced economic issues have been costly in terms of businesses lost that will never resurface, council Vice Chairman Marilyn Niwao said.
Bonham said island people at the lower end of the economic spectrum continue to suffer while those more affluent continue to stock their savings.
There is belief the state is on track to eventually return to numbers seen in Fiscal Year 2019, when the state saw $7.14 billion in revenue. The 6.5% prognostication is based on the assumption COVID-19 numbers drop at the state and national level.
Bonham said the developed of a unified plan for vaccination by the president have led to the new forecasts. There are also unexpected numbers of tourists beginning to return.
“We’re not back to normal, but as people get vaccinated, there’s going to be more willingness to travel,” he said.