More tourists are expected to visit Hawaii this year than previously thought, keeping the state's economic expansion solidly on track, according to the latest forecast from state.

That should mean slightly higher than previously forecast growth in jobs and personal income during 2006, according to a report released yesterday by the Department of Business, Economic Development and Tourism. However, that also means higher-than-expected inflation.

The quarterly report predicts continued growth next year, but at a slower pace than this year. That echoed the sentiments of University of Hawai'i economists who earlier this week predicted continued economic growth this year and in 2007.

According to DBEDT, the tourism industry is expected to host a total of 7.7 million visitors this year, which would be up 3.2 percent from a record 2005. Visitor spending is projected to rise 4.6 percent to $12.4 billion this year. The agency had previously been expecting 2.9 percent visitor growth this year.

Total wage and salary jobs are expected to increase 1.8 percent. Meanwhile personal income is expected to grow 3.2 percent after being adjusted for inflation.

In 2007 real personal income is forecast to grow 2.8, while job growth is expected to be 1.2 percent.

The inflation rate should increase 3.5 percent this year, versus a previously expected rise of 3.3 percent. The inflation rate is expected to rise another 3.3 percent in 2007.

"Based on our robust job growth and strong economic activities especially in the construction and visitor industries, we are optimistic about economic projections in the coming years," said DBEDT Director Ted Liu.

Reach Sean Hao at shao@honoluluadvertiser.com.