India Macro · Quarterly Nowcast

India GDP NowCast.

Report run  17 Jul 2026
Target  FY27 Q1 · Apr–Jun 2026
Official print  ~29 Aug 2026

REAL GDP · year-on-year

6.75%

Holding near trend; services-led

prev quarter 7.83%

R² 0.17 · dir 88%

actual nowcast (median) central band (±MAE, ~57%)

Central band5.2 – 8.3%

Drop-a-group range5.6 – 8.3%

Hard data in hand83%

Central band = ±MAE (~57% range). Drop-a-group = how far the nowcast moves if any one indicator is removed. Hard data = share of the quarter’s three months already published (vs extrapolated).

RBI projection · real GDP · RBI · Jun 2026 MPC1Q27 6.62Q27 6.33Q27 6.54Q27 6.8FY27 6.6%

NOMINAL GDP · year-on-year

8.45%

Credit- and payments-led; GST base corrected

GST corrected for a stale-base error that showed a false drag; now +5.3%, in line with credit & UPI.

prev quarter 9.12%

R² 0.39 · dir 92%

actual nowcast (median) central band (±MAE, ~57%)

Central band6.3 – 10.6%

Drop-a-group range7.8 – 9.7%

Hard data in hand78%

What the nowcast says

Real GDP nowcasts at 6.75%, decelerating from 7.83% last quarter and sitting 0.15pp above the RBI's June MPC projection of 6.6%. Services PMI (58.63) is the strongest support — dropping it would pull the nowcast down to 5.62% — while Manufacturing PMI removal lifts it to 6.17%, showing industrial signals are softer than services; with R2 of just 0.17, treat the 5.18-8.31% band, not the point estimate, as the honest read.

Nominal GDP nowcasts at 8.45%, down from 9.12% last quarter, with the value indicators broadly consistent: dropping Bank credit (15.83%) pulls the nowcast to 7.79%, while dropping GST (5.26%) pushes it up to 9.69%, and UPI removal barely moves it (8.4%). GST itself remains reliable after a base-revision fix, and its modest softness reflects the fading drag from September 2025's rate cut rather than any underlying weakness.

The single biggest caveat is band width relative to point precision: real GDP's 5.18-8.31% central band and weak R2 (0.17) mean direction (88% accuracy) is far more trustworthy than the 6.75% headline itself, given industrial indicators structurally under-track India's services-led growth.

How much to trust it · out-of-sample backtest

Metric	Real GDP	Nominal GDP
R² — variance explained vs naive	0.17	0.39
Correlation, nowcast vs actual	0.76	0.57
Directional hit-rate	88%	92%
Typical miss (RMSE)	±2.1 pp	±3.3 pp

Walk-forward backtest, expanding window, FY19 Q1 onward, COVID quarters excluded (n = 24). Real GDP tracks direction well but adds little on level — it is inherently smooth; nominal carries more genuine skill.

FY27 Q1 indicators

Indicator	Latest	Unit	Hard months
ICI — Eight Core Industries	0.86	% y/y	2 / 3
Services PMI	58.63	index	3 / 3
Manufacturing PMI	54.73	index	3 / 3
Air passengers (domestic)	5.07	% y/y	2 / 3
GST collections	5.26	% y/y	2 / 3
Bank credit	15.83	% y/y	2 / 3
UPI payment value	21.4	% y/y	3 / 3
PV retail (4W)monitored	23.1	% y/y	3 / 3
2W retailmonitored	15.08	% y/y	3 / 3

Values feeding the current-quarter estimate. “Hard months” = actual data in hand of the three in the quarter; the rest is extrapolated. Rows tagged monitored are tracked for context and do not feed the model — on this sample they carry no predictive signal for real GDP.

Model-free z-scores · FY26 Q1 → FY27 Q1

Indicator	FY26 Q1	FY26 Q2	FY26 Q3	FY26 Q4	FY27 Q1
ICI — Eight Core Industries	-0.44	+0.10	-0.30	-0.19	-0.55
Services PMI	+0.98	+1.32	+0.92	+0.78	+0.87
Manufacturing PMI	+1.32	+1.50	+0.99	+0.55	+0.36
Air passengers (domestic)	-0.27	-0.36	-0.30	-0.32	-0.26
GST collections	-0.29	-0.25	-0.64	-0.55	-0.39
Bank credit	-0.38	-0.33	+0.16	+0.57	+0.88
UPI payment value	-0.60	-0.62	-0.62	-0.50	-0.61
PV retail (4W)monitored	-0.30	-0.38	-0.11	-0.11	-0.02
2W retailmonitored	-0.22	-0.33	-0.05	+0.04	-0.11

above long-run average below long-run average Standard deviations from each indicator’s own history — independent of the model. monitored = tracked for context, not a model input.

Terms

Drop-a-group range: The span of nowcasts obtained by removing each indicator in turn. A tight range means no single series is driving the result; a wide one means the forecast leans on specific indicators.
Hard data in hand: Share of the current quarter’s monthly indicator readings that are already published, versus model-extrapolated. Higher means less of the nowcast rests on extrapolation.
Bridge equation: A simple regression linking quarterly GDP to monthly indicators aggregated up to the quarter, plus a lag of GDP itself. This model estimates every one- and two-indicator bridge and averages their forecasts — robust when the sample is short and relationships shift.
MAE — Mean Absolute Error: The average size of past nowcast misses, ignoring direction. The ±MAE band shown on each chart is the ~57% confidence range.
R² (out-of-sample): Share of the variation in actual GDP the nowcast explains in backtest, measured against a naive running-average forecast. Higher means more genuine skill.
RMSE — Root Mean Square Error: Typical miss, penalising large errors more heavily than small ones.
Directional hit-rate: How often the nowcast gets the direction right — whether GDP rose or fell versus the prior quarter.
YoY — Year-on-year: Change versus the same quarter or month one year earlier.
PMI — Purchasing Managers’ Index: Monthly business survey; 50 = no change, above 50 = expansion, below = contraction.
ICI — Index of Eight Core Industries: Combined output of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — about 40% of industrial production.
GST — Goods & Services Tax: Monthly indirect-tax collections; a nominal, services-inclusive proxy for activity.
UPI — Unified Payments Interface: Value of real-time digital payments each month; a fast proxy for consumption.