The National Statistical Office (NSO) has estimated India’s GDP growth at 7.8% for Q1 FY2027, exceeding ICRA’s forecast (+7.0%). However, this marks a deceleration from the upwardly revised 8.6% print for Q4 FY2026. Led by the slower growth in services, the overall gross value added (GVA) expansion also moderated to 8.2% from 8.7% in the previous quarter. However, GVA growth outpaced that for GDP in Q1 FY2027, reflecting the compressed growth in net indirect taxes on products (at a 12-quarter low 3.9%). Besides, the NSO has published updated national accounts for FY2023-2026, after incorporating the newly published industrial output and producer price indices. While annual GDP growth has undergone marginal revisions, the disaggregated quarterly data revealed material differences vis-à-vis initial estimates. With the strong Q1 print, ICRA has now raised its FY2027 GDP growth forecast to 7.1% from 6.7% earlier, even as downside risks owing to the impact of poor monsoon and prolonged West Asia tensions persist.

• Q1 FY2027 GDP growth pegged at 7.8%: The YoY GDP expansion has been estimated at higher-than-expected 7.8% in Q1 FY2027 (+6.9% in Q1 FY2026). However, this is lower than the upward revised 8.6% print for Q4 FY2026, reflecting the slowdown in growth for private final consumption expenditure and government final consumption expenditure and a drag from net exports. Nominal GDP rose by just 10.3% YoY in Q1 FY2027 amid a low 2.5% deflator, which is surprising given the materially higher inflation prints.
• Annual and quarterly national accounts revised: The NSO has released updated quarterly (Q1 FY2023- Q4 FY2026) and annual (FY2023-FY2026) series of national accounts, after incorporating the Output producer price index (OPPI), Index of Industrial Production (IIP) with base year 2022-23, banking services price index and updated administrative data from different sources. Notably, the expansion in GDP for Q4 FY2026 has been revised up by a sizeable 0.7 pp to 8.6%.