Activating Group: If the rate of electrophilic aromatic substitution of monosubstituted benzene is higher than that of benzene in ideal condition, the substituent by which the substitution rate is increased, is called activating group. Example; .
Generally, the activating groups are electron-donating groups.
As has the oxygen atom which is more electronegative than the carbon atom so it can withdraw the electron from the benzene ring by -I (inductive effect) effect. So it acts as electron-withdrawing group.