The Governor of the Central Bank of Solomon Islands says the country's economy is growing.

Denton Rarawa said this when delivering his presentation on the state of the country's economy to an investment team from Papua New Guinea at the Heritage Park Hotel.

Mr Rarawa said the growth in the production base of the economy was in the forestry, agriculture and fisheries sectors last year.

He said the growth is expected to continue this year.

Mr Rarawa said that the country's inflation is low and that banks in the country have surplus liquidity, available for lending and adequate foreign reserves to boost external trade mainly because of budget support from donor country in the form of aid money.

The Central Bank Governor said there are major challenges in renewed inflation pressures, phasing out of the forestry sector, the growing population, and signs of rising poverty but the country has so much to offer in terms of investment.