Economic analysis

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TBS 905 – Economic Analysis of Business
Germany and United Arab Emirates

Surbhi Sawalka (4662398)

Introduction ------------------------------------------------------------------------------------------------------------Part 1 Economic Indicators --------------------------------------------------------------------------------------------------Part 2 Conclusion --------------------------------------------------------------------------------------------------------------Part 3 References --------------------------------------------------------------------------------------------------------------Part 4

The report is an analysis of the economies of two nations; Germany and UAE. The analysis will help us understand how contrasting or similar their economies are. This will be done by looking at four economic indicators; Household Final Consumption Expenditure, Net Exports, Unemployment and Gross Fixed Capital Formation. The first variable (Household Consumption Expenditure) will help us to figure out the household consumption pattern that prevails in the two nations. The second variable (Net Exports) will let us understand the foreign trade structure and whether the country is into surplus or deficit. The third variable (Unemployment) will help us determine the level of unemployment that prevails in the two economies. The last variable that will be taken into consideration is Gross Fixed Capital Formation which will give us a clear picture of the investment pattern and structure in Germany and the UAE. Before getting into the details of the different economic indicators, let’s get two know about the two economies. Germany being a part of the European Union is a High income and a developed nation (OECD). The country consists of 16 states. The country enjoys a social market economy and has highly skilled labor. Along with this, it also has large capital stock and a comparatively low level of corruption. The country also contributes the maximum to the European Union as compared to other EU nations. The European currency, Euro came into being on January 1, 2002. The monetary policy for the country is controlled by European Central Bank. Since Germany is a federal republic, the tax is levied by the federal government. There is an existence of a number of direct and indirect taxes. Have a look at the following: Source: United Arab Emirates consists of seven emirates namely Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Ajman and Umm Al Qwain. United Arab Emirates is also a part the recently formed Gulf Corporation Council. This body encourages free trade among nations. The tax structure that prevails in UAE is different as no forms of tax exist in this part of the world. Due to this, the overall level of tax burden is relatively less (Approximately 6.1% of GDP). As will be discussed in the report, the maximum revenue for the country is generated from oil and gas. There exists an Islamic banking system in this nation. Have a look at the following;


Economic Indicators
The following indicators (World Bank) will help us gain a deeper insight into the economies of the two nations. This will thus help us o understand how similar or different they are from one another. Household Final Consumption (% of GDP)

The above indicator majorly consists of the total disbursement or total expenditure on individual goods and services citizens of a nation (this also consists of those items sold at below market prices). This also includes the possible durable goods, some of them being washing machines, computers, cars, televisions etc. and the grants and permit fees that are paid to the government. The above indicator forms a major part of the GDP.

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