We've seen the half-yearly figures decline already. Today's report showed that overall Honolulu prices in the last half of 1997 were down 0.2 percent from the first half of the year. Economic consultant David Ramsour, a former Bank of Hawaii chief economist, believes that in real terms Hawaii probably already is experiencing deflation. The prices people actually pay probably were down 1 percent last year, said Ramsour, who doesn't think the federal survey accurately reflects the way people shop. Japanese businesses and others have been selling off assets to meet debt obligations, and that has reflected on local property values.
Shoppers have more choices, and more big discounters have entered the market.
Also, many people aren't making big purchases, out of concern about the economy, he said. But not all grocery shoppers are seeing the benefits of low inflation. Honolulu grocery prices were up 3.1 percent in the second half of 1997 compared with the same period of 1996, according to the federal study. Eating out cost more, too, an increase of 1.1 percent. Housing costs, a bigger factor in the cost of living than food prices, were up only 0.1 percent.