GUAM’S economy is growing, albeit slowly, and tourism is headed for its best year since 1997. That was the uncharacteristically optimistic report given Thursday morning at the Guam Hilton by Joseph P. Bradley, senior vice president of the Bank of Guam and chief economic and business continuity officer.

Formerly chief economist for the government of Guam, Bradley, who has been with Bank of Guam for 20 years, is considered an expert on Guam’s economy. He jokes about his tendency recently to be just a bit gloomy in his outlook, but was pleased to deliver some pretty optimistic numbers in this economic update.

“It looks like Guam’s economy is starting to recover,” he reported, “not only from the crisis in Japan on March 11, last year. We’re getting better than we were the year before last. And we’re getting better than we were the year before that.”

We are on our way to a calendar year figure of just about 1.3 million visitors for 2012. “That’s not bad, I’ll take that,” Bradley said. Japanese arrivals are up compared to two years ago, Korean and Taiwan arrivals are the same, and he pointed out “these are our three top markets.”

Construction activity has picked up somewhat, not a lot but a little, and as for the buildup, well, Bradley said “there are a lot of military personnel wandering around Tumon.” We still aren’t creating many jobs, he noted. “In fact, in the last two years we’ve lost 2,270 jobs in our economy. That’s not helpful.”

However, he said: “We should see an improvement in the third quarter payroll report, particularly in the services industry, hotels, restaurants, those sorts of things, because we really are seeing an improvement in the visitor arrivals.”

On our way

Bradley projected, based on airplane arrivals, that Guam is on its way to 1.306 million visitors for the year. “That will be the best year since 1997, a year which ended disastrously for Guam’s visitor industry with an airliner crash and a super typhoon,” Bradley said.

As for inflation, the economist said prices on Guam are rising very moderately. “In the last two years consumer prices have risen by 6.6 percent, but in the last year only by 2.9 percent. I can live with that,” he commented. “We’ve had higher rates of inflation previously.”

He added deposits in Guam banks have been rising. “That’s a good thing for the economy in general. Total deposits have grown by $161 million, or 8.1 percent from June 2010 to June 2011, and another $192 million from June 2011 to June this year, and that’s 8.9 percent growth.” He attributed some of that growth to the tax refunds of late last year and early this year, many of which were deposited in bank accounts. Loan activity is also increasing, but not as dramatically, he said.     

Guam’s real economic growth in 2010 was 1.2 percent, up to $4.1 billion. While that rate of growth is less than the U.S. mainland in that year, Guam has only had one year of negative growth in its economy in the last nine years, and that was in 2006. “Since 2007, we’ve seen slow growth.”

Turning his attention to the Commonwealth of the Northern Mariana Islands, Bradley said they are also experiencing slow growth since 2010, but he added “that follows six straight years of decreases in gross domestic product.” The CNMI’s GDP has shrunk to nearly half what it was in 2003.

Bradley said worldwide economic problems persist. Japan, our main tourist source, is concluding its second lost decade, 20 years of a flat economy. China is slowing down, South Korea’s economy is also in trouble, “and Europe remains the greatest global threat to the economy.”

Syria, however, poses the greatest immediate threat because Turkey, a NATO member, may get pulled into the conflict. “I hope that things settle down there soon,” Bradley said.

As for the United States, the Bank of Guam economist cited continuing obstacles to recovery, most notably the impending “fiscal cliff.” He noted that this crisis is primarily political, rather than an economic issue. “But it’s an issue that’s going to have massive economic impacts if it isn’t settled.”

Bradley concluded his basically optimistic economic update for Guam by pointing out that the last time he painted a somewhat rosy picture, in March 2011, an earthquake and tsunami hit Japan the very next day.