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Principles of Macroeconomics Assignment (Srishti-3240)

The document analyzes the GDP growth trajectories of India, Germany, and the United States over the last 1-2 decades, detailing factors driving their growth and the impacts of COVID-19 and the Ukraine war. Each country experienced significant disruptions, with India facing a sharp contraction due to lockdowns, Germany suffering from energy supply shocks, and the US dealing with inflation and market volatility. Despite these challenges, the countries showed resilience through various policy responses and economic reforms.

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7 views9 pages

Principles of Macroeconomics Assignment (Srishti-3240)

The document analyzes the GDP growth trajectories of India, Germany, and the United States over the last 1-2 decades, detailing factors driving their growth and the impacts of COVID-19 and the Ukraine war. Each country experienced significant disruptions, with India facing a sharp contraction due to lockdowns, Germany suffering from energy supply shocks, and the US dealing with inflation and market volatility. Despite these challenges, the countries showed resilience through various policy responses and economic reforms.

Uploaded by

srishti4322
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NAME- SRISHTI

SECTION- A
ROLL NO.:- 3240
EXAM ROLL NO.:- 22331503195
SEMESTER- 6th

PRINCIPLES OF
MACROECONOMICS-1
QUESTION -01
Pick any three countries and write about their GDP growth
rate trajectory in the last 1-2 decades and factors behind it.
And the impact of COVID and ukraine war on their GDP.

ANSWER-01
Here's a structured write-up for three countries: India, Germany,
and the United States — including their GDP growth trajectory
over the last 1–2 decades, the factors behind their growth, and the
impacts of COVID-19 and the Ukraine war on their GDP.

1. INDIA

GDP Growth Trajectory (2005–2023):


2005–2010: High growth averaging 8–9%, driven by IT,
services, and consumption.
2011–2016: Moderate growth around 6–7%, affected by
policy slowdowns.
2017–2019: Gradual slowdown to 4–6% due to banking sector
stress.
2020: GDP shrank -7.3% due to COVID lockdowns.
2021–2023: Strong recovery with 8.7% in 2021, stable at 6–7%
afterward.
Factors Behind Growth:
Expansion of IT and service sectors.
Growing middle class and domestic demand.
Government reforms and infrastructure investment.

Impact of COVID-19 on GDP (India):


National lockdown in 2020 halted economic activity.
Sharp contraction in sectors like construction, retail, and
tourism.
Job losses and reduced consumer spending hurt growth.

Impact of Ukraine War on GDP (India):


Higher oil and fertilizer import bills worsened trade
balance.
Inflation rose due to global food and fuel price spikes.
Fiscal pressure from increased subsidies and reduced
revenue.
2. GERMANY

GDP Growth Trajectory (2005–2023):


2005–2008: Steady growth (~2–3%) driven by exports and
industry.
2009: GDP shrank by -5.6% during the global financial
crisis.
2010–2019: Strong recovery; stable growth around 1.5–
2.5%.
2020: GDP fell by -4.6% amid COVID lockdowns.
2021–2023: Recovery was weak; 2023 saw slight contraction
due to energy crisis.

Factors Behind Growth:


Export-led growth in machinery, cars, and chemicals.
Strong labor market and apprenticeship system.
EU integration and open trade policy.
Robust infrastructure and green transition policies.
Emphasis on fiscal discipline and innovation.
Impact of COVID-19 on GDP (Germany):
Factory shutdowns and supply chain bottlenecks.
Exports fell drastically due to global demand crash.
Tourism and automotive sectors hit hard.
Wage subsidies (Kurzarbeit) prevented mass
unemployment.
Digital transformation and green spending increased.

Impact of Ukraine War on Germany:


Cut-off from Russian gas caused energy supply shock.
Energy-intensive industries (steel, chemicals) slowed
down.
Government introduced subsidies and price caps.
Inflation peaked above 10%, reducing household
spending.
Shifted focus to renewable energy and LNG imports.
3. UNITED STATES (US)

GDP Growth Trajectory (2005–2023):


2005–2008: Stable growth (~2–3%) until the 2008 crisis.
2009: Recession caused GDP drop of -2.6%.
2010–2019: Gradual recovery with ~2.2% average
growth.
2020: Shrinkage of -3.4% due to COVID shutdowns.
2021–2023: Strong rebound (5.9% in 2021), slowed to 2%
due to inflation and Fed rate hikes.

Factors Behind Growth:


Consumer-driven economy with robust services and tech
sector.
Innovation and entrepreneurship ecosystem.
Strong institutions and capital markets.
Stimulative fiscal and monetary policy.
Large-scale domestic energy production.
Impact of COVID-19 on GDP (USA):
Lockdowns caused massive job losses and business
closures.
$2 trillion+ stimulus fueled recovery and consumer
spending.
Acceleration of digital economy and remote work.
Supply shortages triggered inflation.
Health and logistics sectors expanded rapidly.

Impact of Ukraine War on USA:


Global oil price hike raised domestic fuel costs.
Inflation surged to 40-year highs, prompting Fed hikes.
High food prices burdened low-income households.
Military aid to Ukraine added to defense expenditure.
Economic uncertainty led to market volatility and slower
investments.
CONCLUSION
The COVID-19 pandemic and Ukraine war significantly
disrupted global economies, impacting GDP growth across
India, Germany, and the United States. While each nation
faced unique challenges, common effects included inflation,
supply chain disruptions, and fiscal strain. Despite
setbacks, these countries demonstrated resilience through
policy responses, economic reforms, and adaptive recovery
strategies. The crises highlighted the importance of
economic flexibility, energy security, and global
cooperation in navigating future uncertainties.
Thank You

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