The economic growth is expected to come back to 6 percent by March 2020, said Indranil Sen Gupta, chief economist of BofA Securities, adding this "again is a big comedown from what we expected earlier".

“What we say is that the worst of worse is over, so we think that growth has bottomed, but the bottom itself is far deeper and longer than we envisaged. So if you went back a year, everyone would have said including us that growth would bottom around 6.50 percent, it is actually bottoming at 4.5 percent," Gupta said in an interview with CNBC-TV18.

“The economy has been hit by massive real lending rate shock because commodity prices have collapsed and dragged down the core wholesale price index (WPI) inflation 160 basis points since March. So while the RBI has been easing and that has brought down the nominal marginal cost of funds based lending rate (MCLR) by about 45 basis points, the real MCLR has shot up by 125 basis points. So naturally, when you have such a massive rise in real lending rates, you tend to see growth falling much more than expected," he added.

First Published:Dec 23, 2019 2:38 PM IST