THE International Monetary Fund on Thursday said the recent surge in COVID-19 cases in India posed downside risks to their April forecast of 12.5 per cent growth in fiscal years 2021 and 2022. The global monetary policy body said they will revisit that growth forecast in their next update due in July.

When asked about the economic fallout of the second wave in the world's second most populous nation, IMF spokesperson Mr Gerry Rice said they are monitoring the situation.

"We are following these developments very closely, and we will be revisiting that growth forecast in our World Economic Outlook update, which will be forthcoming in July, so not too far off in the distance, but we will be looking at that again," he said, but gave no further details.

Expressing his condolences and sympathy with the victims of the pandemic, Mr Rice said the IMF is engaged closely with the Indian authorities and stand ready to strengthen that engagement, the dialogue, and to scale up their technical collaboration.

He said the developments in India are being assessed with concern as they expect it to spillover to the region and the global economy, contingent on the severity of the crisis.

"There will be spillovers contingent on how deep and how long the severity of this crisis continues. India is a country that is important to, not just neighbouring countries of India, but to the global economy," he added.

For India, the IMF recommended to continue with a coordinated policy response to fight the virus, including through accelerating the vaccination campaign and providing fiscal resources to the health sector and social support to the most vulnerable.