The year-on-year (YoY) growth in economic activity, as measured by the ICRA Business Activity Monitor - an Index of high frequency indicators, rose to 10.0% in February 2026 from 8.9% in January 2026, partly on account of a favourable base. As many as 11 of the 16 constituent indicators reported a stronger YoY expansion in February 2026 vis-à-vis January 2026, including those pertaining to the auto, trade and transport/mobility, and financial sectors. However, core output growth halved to 2.3% in February 2026 from 4.7% in January 2026, which is likely to pull down the Index of Industrial Production (IIP) growth to ~4.0% from 4.8%, respectively. Growth in domestic economic activity is likely to ease in March 2026, owing to the adverse impact of the conflict in West Asia and the consequent surge in energy prices, supply disruptions, and financial market volatility.

• Growth in ICRA Business Activity Monitor picked up in February 2026: The YoY growth in the Index improved to 10.0% in February 2026 from 8.9% in the previous month, partly owing to a favourable base (Jan/Feb 2025: +10.6%/+6.4%).
  
• Core output growth weakened in February 2026 vis-à-vis January 2026: Even before the start of the West Asian crisis, the YoY growth in core output halved to a 3-month low of 2.3% in February 2026 from 4.7% in January 2026.
  

Source: ICRA Research