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India forecast robust economic growth of 11% for the coming fiscal year on Friday in its annual economic survey, after a massive COVID-19 vaccination drive and a rebound in consumer demand and investments.

The Indian economy, which the International Monetary Fund singled out as a global bright spot only a few years ago, is set to contract 7.7% in the current fiscal year to March 31, its worst performance in four decades, the government said in its report.

But it predicts the rollout of vaccines against COVID-19, which has killed 153,847 Indians, will re-energise Asia’s third-largest economy next year, putting it on track to post the strongest growth since India liberalised its economy in 1991.

The survey’s projections form the basis for key figures in the budget, due to be delivered on Monday by Finance Minister Nirmala Sitharaman.

While the survey forecast a “V-shaped” economic recovery, it also cautioned that it would take at least two years to regain pre-pandemic levels.

“With the economy’s returning to normalcy brought closer by the initiation of a mega vaccination drive, hopes of a robust recovery in services sector, consumption, and investment have been rekindled,” said the survey.

India has started inoculating millions of people with two vaccines - Serum Institute from India’s COVISHIELD, licensed from Oxford University and AstraZeneca, and COVAXIN, developed domestically by Bharat Biotech and the Indian Council of Medical Research.

Despite the optimistic outlook, officials say Sitharaman may have to make tough choices to the government’s ballooning debt in check while presenting a spending plan able to lift the economy.

Chief Economic Adviser Krishnamurthy Subramanian, who wrote the economic report told a news conference, that reforms can speed up the economic recovery.

The government’s attempt to open up the country’s vast agriculture sector to private players has set off mass protests by farmers, prompting an offer by the government to suspend its implementation for 18 months.

“Reforms must go on to enable India to realize its potential growth and erase the adverse impact of the pandemic,” Subramanian said.

India must also step up health spending from the current 1% of gross domestic product, one of the lowest for a major economy, to 2.5 to 3%, he said. Meanwhile, Brazil posts record 2020 primary budget deficit 10% of GDP. India’s economy contracted at a 7.5% annual pace in the July-September quarter following a record slump of nearly 24% in the previous three months that pulled the country into a recession. India last suffered a recession in 1979-80 after an oil shock.

A country enters a technical recession if its economy contracts for two successive quarters.

The downturn followed a strict two-month lockdown imposed across the country beginning in March to combat the pandemic. It triggered massive unemployment in small and medium-sized businesses and left farmers in distress.

Brazil reported a record primary budget deficit of 743.1 billion reais ($138 billion) last year, the Treasury said on Thursday, as crisis-fighting expenditure saw total outgoings surge by a third and the economic slump hit revenues.

While the annual deficit was a runaway record, both in nominal terms and as a share of gross domestic product, it was below the government’s last official estimate of 831.8 billion reais and below indications from Treasury officials that it could be just under 800 billion.

The Treasury said the deficit last year was a record 10% of GDP. That was less than the 11.5% forecast by the government last month. The 2019 primary deficit was 95 billion reais.

Treasury Secretary Bruno Funchal said 2021 would again be “extremely challenging”, but insisted that the government would not break the spending cap, its key fiscal rule that limits public spending growth to the previous year’s rate of inflation.

“It will be an extremely complex exercise, but one in which we must maintain fiscal discipline and contain expenditure,” Funchal told reporters in an online news conference.

December’s deficit excluding interest payments came in at 44.1 billion reais, bigger than the 35.7 billion reais median forecast in a Reuters poll of economists.

Net revenue in December slumped by more than a third in real terms to 131.6 billion reais from the same month a year earlier, while net revenue over the calendar year fell 13% in real terms to 1.47 trillion reais, the Treasury said.