The YoY growth in economic activity, as measured by the ICRA business activity monitor, eased to a 14-month low of 5.9 per cent in October from 8.3 per cent in September this year.
The growth in industrial production index (IIP) may be 2.5-3.5 per cent in October 2025 compared to 4 per cent in September, even as manufacturing growth may remain relatively healthy, ICRA said in a note.
Post the festive season, ICRA expects restocking to boost volumes for some durables, whereas other big-ticket items may see continued discounts to clear inventories.
Overall, while gross domestic product (GDP) growth is projected at a healthy 7 per cent in the second quarter (Q2) of fiscal 2025-26 (FY26), albeit lower than the 7.8 per cent seen in Q1, ICRA expects it to ease below this level in the second half of the fiscal unless the government capital expenditure allocation is enhanced and the tariff-related uncertainties ebb.
At present, ICRA forecasts GDP growth to print at 6.8 per cent in FY26.
Five of the 12 indicators pertaining to financial conditions saw some easing in October this year versus September. Notably, money market-related indicators remained under duress in the month, before cooling in early-November 2025, ICRA added.
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