See upturn in capex cycle, growth momentum to pick up: RBI report

'Can't let our guard down on inflation'

Waning input cost pressures, buoyant corporate sales, and a turn-up in investments in fixed assets suggest the beginning of an upturn in India’s capital expenditure cycle, which could help improve earnings in the coming quarters and speed up “the momentum of growth in the Indian economy”, the Reserve Bank of India (RBI) said in its monthly bulletin for December.

The State of the Economy article in the Bulletin, authored by RBI staff, including Deputy Governor Michael Patra, however, flagged inflation concern. “[Global] Inflation may be slightly down, but it is certainly not out. If anything, it has broadened and become stubborn,