The Asian Development Bank (ADB) said on Wednesday that India’s GDP will rebound strongly by 11 per cent in 2021-22 due to continued economic recovery boosted by increased public investment, vaccine rollout, and a surge in domestic demand. But it also cautioned that the surge in cases could hurt the recovery.

The ADB forecast assumes that vaccines are deployed extensively across the country and the second wave of Covid is contained. The multilateral agency has upgraded India’s GDP growth projections from its earlier estimate of 8 per cent expansion.

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The devastation caused by the second wave has triggered worries about the health of the economy and economists say the localized lockdowns across the country could hurt growth. Rating agency ICRA on Wednesday said it expects the country’s GDP to grow by 10-10.5 per cent in FY22 as against 10-11 per cent expected earlier. The key downside risks to its forecasts are a continuation of the new wave of infections, an extension of the restrictions and severe restrictions being imposed in additional states and the existing vaccines not being effective enough against the new variants.