As the Department of Business, Economic Development, and Tourism (DBEDT) released its 2025 Quarterly Statistical and Economic Report, an optimistic tone was set for Hawaii's economic forecast. The report, which surfaced on Friday, indicates a boost in projections to 1.6 percent growth for 2025 and 1.5 percent for 2026. Despite falling foul of a lengthy 43-day federal government shutdown, Hawaii's economy seems to have weathered the storm with several sectors flexing their economic muscles.
Visitor spending remains strong, and inflation fell from 4.1% in January to 2.2% in September. Unemployment dropped to 2.6% in August, the third lowest in the U.S., according to DBEDT. However, visitor arrivals declined 3.2% in the third quarter of 2025.
Although visitor arrivals declined, spending increased, suggesting a higher-spending demographic. DBEDT reported a 6.7% rise in total visitor spending in October 2025 compared to the same month last year. The construction sector also grew, with a 12.7% increase in the contracting tax base in the first half of 2025.
Honolulu’s CPI-U is projected to rise 2.8% in 2025 and decline to 2.3% by 2028. DBEDT Director James Kunane Tokioka highlighted factors supporting Hawaii’s economic growth, noting that non-tourism industries—such as Non-durable Goods Manufacturing, Information, and Finance and Insurance—along with increased visitor spending, contributed to the economy’s resilience despite a decline in overall arrivals.
Hawaii’s outlook aligns with national and international forecasts. DBEDT projects U.S. growth at 1.9% in 2025 and 1.8% in 2026, while China is expected to grow 4.8% in 2025 and 4.3% in 2026.
Hawaii’s GDP is projected to rise 1.9% by 2028. According to the Hawaii DBEDT Director James Kunane Tokioka expressed optimism about the state’s economic future, stating, “I remain optimistic about Hawaii’s economic future and look forward to a year of opportunity and progress in 2026.”
