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The International Monetary Fund (IMF) has cut India's gross domestic product (GDP) growth forecast to 9.5 percent for the fiscal year to March 31, 2022 as the onset of a severe second COVID-19 wave cut into recovery momentum. This forecast for 2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in April before the second wave took a grip. For 2022-23, it expects economic growth of 8.5 per cent, larger than the 6.9 per cent it had projected in April.

IMF has said that India's economy is gradually recovering from a deep contraction in the fiscal year ended March 31, 2021 (7.3 per cent) and a subsequent severe second wave of COVID-19. It estimates the pandemic has reduced per capita incomes in advanced economies by 2.8 per cent, relative to pre-pandemic trends over 2020-2022, compared with an annual per capita loss of 6.3 per cent a year for emerging market and developing economies (excluding China).

It further said these revisions reflect important extent differences in pandemic developments as the delta variant takes over. Close to 40 percent of the population in advanced economies has been fully vaccinated, compared with 11 percent in emerging market economies, and a tiny fraction in low-income developing countries. It also stated that faster-than expected vaccination rates and return to normalcy have led to upgrades, while lack of access to vaccines and renewed waves of COVID-19 cases in some countries, notably India, have led to downgrades.