The Indian economy is projected to post a narrower contraction of 8 per cent this fiscal but may witness double-digit expansion in the next two, according to the International Monetary Fund (IMF), which recently estimated the economy would grow by 11.5 per cent in 2021-22 and 6.8 per cent in 2022-23 as it gathers momentum due to vaccination and pick-up in economic activity.

IMF, which released its update to the World Economic Outlook report, said India is projected to be the fastest growing major economy for the next two years, displacing China, which is estimated to grow by 8.1 per cent and 5.6 per cent in the next two fiscals.

China is estimated to grow by 2.3 per cent in the current fiscal, the only major economy to post expansion.

IMF said although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook.