Real GDP nowcasts at 6.6%, down from 7.83% last quarter, and sits almost exactly on the RBI's own 6.6% MPC projection for the quarter. Services PMI (58.63) is the strongest support — dropping it would pull the nowcast to just 5.46% — while the ICI reading of 0.86 is the drag, as excluding it lifts the nowcast to 8.04%. Directional accuracy is decent at 88%, but R² of just 0.17 is an honest reminder this model reads turning points better than levels, especially since industrial indicators structurally miss India's services engine.
Nominal GDP nowcasts at 8.45%, down from 9.12% last quarter, with all three value indicators now pointing the same direction. Bank credit at 15.83% is the strongest pillar — dropping it cuts the nowcast to 7.79% — while GST at 5.26%, once corrected for a stale-base error that had wrongly shown -1.2%, is confirmed positive but still the softest of the three, weighed down by the September 2025 rate cut until it laps out by October 2026. With directional accuracy at 92%, this is the more reliable of the two nowcasts.
The single most important caveat is band width, not data quality: the real GDP central band spans 5.04-8.18%, wide enough to straddle both acceleration and a further slowdown from last quarter's 7.83%. Hard data coverage is solid (75-78%), and the GST correction removes what was the one live indicator distortion, so the residual uncertainty is genuinely structural — a low-R² model applied to a growth rate that itself barely moves quarter to quarter.
| 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 |
| 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) | -3.49 | % y/y | 1 / 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 |
| 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) | -0.26 | -0.36 | -0.30 | -0.31 | -0.37 |
| 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 |