Even after 50% vaccination, risk of COVID-19 third wave looms large: IMF's Gita Gopinath

India has emerged from a "very tough second wave" of Covid-19, the International Monetary Fund's (IMF) Chief Economist Gita Gopinath, said on Tuesday at the release of the flagship report that showed India continuing to be the world's fastest growing major economy clocking a growth rate of 9.5 per cent this fiscal year and 8.5 per cent in the next.

However, while speaking to a leading news channel, she said with 50 per cent vaccination, India is high in confidence, but the risk of a third wave remains.

“With such a large population, you (India) already have your 50 per cent vaccinated that gives you confidence. But the risk that there could be a third wave remains,” said Gopinath, who earlier said a good vaccination rate is also helpful for the economy.

Meanwhile, the IMF's World Economic Outlook (WEO) report kept the gross domestic product (GDP) growth projections it had made in July while India was in the grip of Covid-19's second wave and had cut by 3 per cent its forecast of 12.5 per cent made in April before the pandemic's resurgence.

Briefing reporters at the release of the report in Washington, Gopinath said: "India, came out of a very, very tough second wave and that led to a big downgrade in July but we have no change."

"India is doing well in terms of vaccination rates and that's certainly helpful," she said.

India does, however, face many challenges, she noted.

"As of now, you know there are many challenges that the Indian economy always does face with regard to the financial market, with regard to the fact that the virus has not gone yet," Gopinath said.