Mumbai, July 27 - The Reserve Bank of India (RBI), in its macro-economic report released Monday, said even though indicators pointed to an economic turnaround and business sentiment was looking up, delayed monsoon rain and continuing global recession could dampen growth.

'While indicators such as the higher growth in core infrastructure sector, positive growth in IIP, more optimistic business expectations and forecasts could be viewed as signs of recovery from the slowdown, there are other factors which may dampen the growth outlook such as the delayed progress of monsoon, decline in exports due to the persistence of global recession,' RBI said.

'Lagged impact of the negative growth in manufacturing in the last quarter of 2008-09 on services demand, negative growth in capital goods, decline in the production of commercial vehicles, and an accelerated fall in import growth suggesting dampened demand conditions,' the report added.

The central bank also predicted that while inflation could be seen move up to positive levels by the end of the year, poor monsoons could drive up food prices.