The International Monetary Fund on Tuesday said that after an estimated contraction of 8% in the fiscal year that ended March 31, India is projected to grow at 12.5% during the current year. The Washington-based global financial institution in its World Economic Outlook also projected that Indian economy is expected to grow by 6.9% in 2022.

The IMF’s Managing Divergent Recoveries report also suggested that India is the only country among major world economies that is projected to grow at a double-digit rate. China, on the other hand, which was the only major economy to have a positive growth rate of 2.3% in 2020, is expected to grow by 8.6% in 2021 and 5.6% in 2022.

The fund, with which the World Bank is holding its spring meetings virtually this week, said that the global economy will expand 6% this year. This is up from the 5.5% pace estimated in January.

However, IMF chief economist Gita Gopinath warned that this recovery will be uneven. The IMF also stressed on the high degree of uncertainty surrounding the outlook, and that improvements could easily downgraded by any of several factors, with success against the coronavirus pandemic topping the list.

“Much still depends on the race between the virus and vaccines,” the fund said. “Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade. Large divergences in recovery speeds also raise the prospect of divergent policy stances.”

The projections come at a time when India is battling a second surge in coronavirus cases. India breached the grim milestone of 1,00,000 daily infections for the first time on Monday, and cases jumped by 96,982 on Tuesday, data from the health ministry showed.

On March 31, the World Bank had projected India’s economic growth for the 2021-’22 financial year to be in the 7.5% to 12.5% range. The financial institution had said India was bouncing back from the effects of the coronavirus crisis, but the country was still not “out of the woods”.