Despite higher inflationary pressures, India’s manufacturing sector expanded at the slowest rate in four months in February, but remained relatively strong amid buoyant domestic demand, according to a private survey released on Wednesday.

Rising borrowing costs and manufacturing weakness have slowed the Indian economy. It grew 4.4% year on year in the fourth quarter, down from 6.3% in the previous quarter, according to data released on Tuesday, slower than the 4.6% predicted in a Reuters poll. The manufacturing sector shrank 1.1% year on year in the third quarter, the second consecutive contraction reflecting a drop in exports. The Manufacturing Purchasing Managers’ Index (INPMI=ECI) compiled by S&P Global fell to 55.3 in February from 55.4 in January, but it was higher than a Reuters poll expectation of 54.3 and remained well above the 50-mark separating expansion from contraction for a second month 20th month in a row.