The Central Bank of Solomon Islands is predicting more positive growth for the national economy this year.
Launching the Bank's 2007 annual report in Honiara, Central Bank Governor Rick Hou predicted that agricultural commodities, particularly palm oil production, will subsequently replace the anticipated decline in forestry revenue.
Mr Hou said the bank's forecast was made based on the growth trend in recent years in addition to economic developments in the first four months of this year.
The forestry sector remained the country's major economic driver for many years but a recent government decision to discourage further investment in the logging industry is expected to reduce revenue.
Mr Hou said the government's intention to stimulate rural development in terms of support services to rural farmers is appropriate to provide food that will eventually replace expensive rice imports in subsequent years.
He also said it is encouraging to note the government's move to boost investor confidence in the country by mending to mend distressed international relations with neighboring countries.