Global inflation may have peaked but the balance of risks is increasingly tilted towards a "darkening" global outlook and emerging market economies (EMEs) appear to be more vulnerable, the RBI said in its bulletin for December 2022.

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"The near-term growth outlook for the Indian economy is supported by domestic drivers as reflected in trends in high frequency indicators," it said in the chapter on the state of the economy.

"Waning input cost pressures, still buoyant corporate sales, and turn-up in investments in fixed assets are heralding the beginning of an upturn in the capex cycle in India, which will contribute to a speeding up of growth momentum in the Indian economy," the bulletin said.

It further noted that the equity markets touched a string of new highs during November, buoyed by strong portfolio flows to India. Headline inflation moderated by 90 basis points to 5.9 per cent in November driven by a fall in vegetables prices even as core inflation remained steady at 6 per cent.

"The finances of the Central Government as well as the States improved significantly in first half of 2022-23 with receding negative spillover effects induced by the pandemic, even as the war in Europe has led to targeted fiscal measures," the bulletin said.

On the government's finances, the bulletin said that the Centre had recorded robust tax collections, both direct taxes and GST, reflecting sustained recovery of the economy, improved tax governance and administration as well as healthier balance sheet of the corporate sector.

"India's core digital economy (hardware, software publishing, web publishing, telecommunication services, and specialised and support services) increased from
5.4 per cent of Gross Value Addition in 2014 to 8.5 per cent in 2019," it noted.

Focussing on digital rise, the RBI bulletin said that India's digital economy grew 2.4 times faster than the Indian economy, with strong forward linkages to the non-digital sectors.

The digital output multiplier has increased over time, highlighting the role of digital economy investments to drive growth.

The employment estimates show that 4.9 million people were employed in the core digital sector. Considering the total digitally dependent economy, around 62.4 million workers are employed in digitally disrupted sectors, the bulletin said.

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