4-GERMANY_&_UAE_COMARATIVE_ANALYSIS

UAE & GERMANY Economic Report
TBS904 Autumn 2014Page 1
Assignment Cover Sheet
Subject Code: TBS905-S
Subject Name: Economic Analysis of Business Environment
Submission Type: Project
Assignment Title: UAE & GERMANY Economic Report
Student Name: Hassan Wahdan
Student Number: 4670711
Student Phone/Mobile No. +971551488398
Student E-mail: hw269@uowmail.edu.au
Lecturer Name: Ms. Asima Shirazi, Dr. Scott Fargher
Due Date: Wednesday, 03 December 2014
Date Submitted: Wednesday, 19 November 2014
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Subject: TBS905-S Assignment Title: UAE & GERMANY Economic Report
Student Name: Hassan Wahdan Student Number: 4670711
Due Date: Wednesday, 03 December 2014 Date Submitted: Wednesday, 19 November 2014
Signature of Student:
Student AssignmentReceipt (To be filled in and retained by Student upon submission ofassignment)
Subject: TBS905-S Assignment Title: UAE & GERMANY Economic Report
Student Name: Hassan Wahdan Student Number: 4670711
Due Date: Wednesday, 03 December 2014 Date Submitted: Wednesday, 19 November 2014
Signature of Lecturer

Supervised by
Dr. Asima Shirazi
Prepared By:
Hassan Wahdan 4670711
Assignment about "UAE & GERMANY Economic
Report"
For economic analysis of business– TBS904
Autumn 2014

Table of Contents
1.Abstract .....................................................................................................................................
2.Introduction...............................................................................................................................
2.1UAE.........................................................................................................................................................................................
2.2GERMANY............................................................................................................................................................................
3.Key objective ............................................................................................................................
4.Analysis using Macroeconomic Indicators...............................................................................
5. Components of Gross Domestic Product..........................................................................................................................
6. Measuring Cost of Living ………………………………………………………………….
7.Population, GDP per Capita &Unemployment.................................................................................
8.conclusion .................................................................................................................................
...............................................................................................................................aecearefer.9
1. Abstract
This report is aiming to show how analysis of macroeconomic indicators can help investors to
understand condition of economies of Germany and UAE in order to evaluate their
opportunities and risks. We are about to compare different countries with different locations,
cultures, attitudes, habits and different economic to prevail the strength and weakness of each
economic. Moreover we are about to measure the different component of GDP of the two
countries and measure the two countries GDP growth, inflation rates and unemployment
rates.

2-Introduction
Target of this report is to characterize and measure the United Arab Emirates economy
with the Germany Economy from Macroeconomic view point through researching
economic characteristics & variables for 10 years period 2005-2014 highlighting
similarities & differences between both economies.
2.1-United Arab Emirates
economics of the united Arab emirates is one of the largest economic in the Arab world
(GDP) of $377 (AED1.38 trillion) billion ranking the second after Saudi Arabia in 2012
as UAE successfully diversify their economy in order not to be depending on oil as
71%[1] in UAE economic contribution of non-oil sector. The total population of UAE in
2013 was 9.2 million 1.4 million UAE citizen and 7.8 million other nationalities
[1] (Gulf news)
Moreover UAE has the largest diversify economy in the Arab world as the diversify
towards trade, logistics, tourism and construction [3], average economic growth rate 4 to
4.5% in the year of 2013, however one of the essential income source in UAE is tourism
as they have the world well known hotels, airlines and tools of tourism as they tend to be
less dependent on petroleum [2] (Hvidt 2013)
In addition, UAE considered the largest consumer market in the Arab world as their
imports reached to be $273.5 billion at the year of 2012 [3](www.gulfnews.com )
UAEMap of
Source:Google Images

2.2- Germany
German economy is the fifth big economic in the world and euro largest economy
before france and england and it is a leading country in europe, The area of
germany is around 357,137 sq.km with a total number of population 20.5 Million
[4]3.7 Million with 99.6 % SME,isof companiesnumberand
[www.inexmundi.com]
Germany GDP formation confirm the streenth ofnthair economic since 25.9% of it’s
GDP from financial service, 22.2% from Manufacturing industry, 15.6% from commerce,
transportation,
Germany exporting vichecls16.6%, machinery 18.3, chemicals 14.7% and parts 16.6%
this is resulted of a highly skilled workers, Germany’s high level of education
system ensures that the highest standerd are always met
Imports of germany Crude oil and gas 13.9% which is the big parts of it’s imports;
coming secoundry machinery 11.9%; third chemical goods 11.6%;
And electronic goods 9.8%; motor vehicles and parts 7.9%; foodstuffs 6.1%;others 38.8%
germany ranking is the first in the quality OF infrastractin
in EUROPE 2013 before france and swezerland
Germany is not only an market that attaract investment, but it is also very strong on
research and development, it is in the first ranking in reserch and development in europe
with the percentage of 21% comparing with other euro mempers.[5] [www.gtai.de]

GermanyMap of
Source:Google Images
3- Key Objective
This paper studies highlights economic pointers that shows contrasts and matches of Germany
and UAE economies. The aim of the exploration is to make sense of inclination for any of
these two nations keeping in mind the end goal to choose where to invest capital
(A concise outline of the tow economies was given in the presentation. It will be trailed by
deeper exploration of economic circumstance and patterns using key economic points. To
condense, we will research the future and attempt to give a conservative figure for both
countries

4-Macro Economic Indicators
4.1 Gross Domestic Product (GDP)
GDP is the market value of all final goods and services produced within a country in the
given period of time.
Real GDP is the value of all final goods and services produced at constant (base year) prices
within a country in the given period of time.
Nominal GDP is the value of all final goods and services produced at current prices within a
country in the given period of time.
We will analyze the GDP of both nations. Gross domestic product is an effective measure
for primary economic examination and measurement,GDP demonstrates the strength and
quality of nation's economy in many prospective to give sufficient information for
investor to decide where to invest their capital.
ige cs sl eh c hraer le l rriarie ige w e csa ige rri cel ferare
UAE GDP in billions in US dollars (by 2005 price)
Data Source:ZAWYA.com
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UAE Nominal GDP 147.824 180.618 222.117 257.916 315.475 253.547 286.049 347.454 372.314 402.285 424.748
UAE Real GDP 172.254 180.618 198.385 204.703 211.237 200.162 203.435 213.374 223.355 234.969 245.754
.
50.
100.
150.
200.
250.
300.
350.
400.
450.
UAE

GDP in billions in US dollars (by 2005 price)weamref
In the last 10 years levels of financial yield in both economies has been developed, where
UAE & Germany Real Gdps recorded normal yearly development rate of 4.2% & 1%
respectively since German Economic is highly developed thus it is not expected to find
high growth rates comparing with UAE is a rising economy which shows high figures of
growth rates
However on the Nominal side of GDP UAE Nominal GDP developed with normal yearly
development rate of 14.1% which shows higher Inflation in UAE prices amid these 10
years
It is very clear that German Real GDP & Nominal GDP between these 10 years were
around 13 to 9 times the UAE Real GDP & Nominal GDP because of the way that
German populace arrived at 80.5 million in 2012 against just 8.1 million in UAE.
What happened in US crisis and recession in 2007 has its effect worldwide on the GDP
growth rates in 2008-2009m as shown in UAE and Germany growth rates are -5.4 and -
5.5 respectively during 2009 although it started to recover back in 2010 for both
countries.
We will discuss and illustrate elements of UAE & German Real GDP, Nominal GDP, and
GDP Deflator amid the most recent 10 years 2004 – 2014.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany Nominal GDP 2,810.5 2,855.9 3,002.1 3,445.3 3,756.8 3,420.2 3,410.6 3,750.7 3,537.3 3,737.6 3,837
Germany Real GDP (US$ at 2005 prices) 2,831.2 2,855.9 2,966.9 3,067.6 3,091.3 2,918.8 3,033.7 3,144.8 3,163.1 3,169.9 3,209.9
.
500.
1,000.
1,500.
2,000.
2,500.
3,000.
3,500.
4,000.
4,500.
Germany

UAE Real GDP as shown in the figures recording USD 234.9 billion in 2013 up from
USD 172.2 billion in 2004 with average annual growth rate of 4.2% during 10 years
period (2004-2014) with highest growth rate in recorded in 2006 of 9.9% where UAE was
facing an booming in its economy then growing at a declining rate during 2006-2008 and
reached the lowest growth rate in mainly because of the economic crises that affects the
productions levels in UAE..
In 2010 - 2012 Real GDP UAE production levels begin to raise again reaching growth
rates of 4.7% in 2012 & 5.2% in 2013 attributed mainly due to increase in Non-oil
production.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UAE 9.566 4.855 9.837 3.184 3.192 -5.243 1.635 4.885 4.678 5.2 4.6
-6.
-4.
-2.
.
2.
4.
6.
8.
10.
12.
UAE Annual Growth Rate
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany 0.717 0.872 3.886 3.392 0.773 -5.58 3.938 3.66 0.583 0.214 1.3
-8
-6
-4
-2
0
2
4
6
Germany Annual Growth Rate

German Real GDP recorded USD 3,169 billion in 2013 up from USD 2,831 billion in
2043 with average annual growth rate of 1% during 10 years period (2002-2012). During
2004-2007 German Real GDP has been stably growing annually, however in 2009
declined by -5.5% due to global economic crisis. During 2010 the German economy
recovered recording growth of 3.9% but it falls again in 2012 because of the crises that
happen in Euro area from some Euro countries lead to the demand of German goods and
service declined that leads to recession. Government is trying now to face this crisis
which leads to relative increase in GDP 2014.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany Real GDP 2,831.2 2,855.9 2,966.9 3,067.6 3,091.3 2,918.8 3,033.7 3,144.8 3,163.1 3,169.9 3,209.9
2,600.
2,700.
2,800.
2,900.
3,000.
3,100.
3,200.
3,300.
Germany Real GDP
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 204
UAE 172.254 180.618 198.385 204.703 211.237 200.162 203.435 213.374 223.355 234.969 245.754
.
50.
100.
150.
200.
250.
300.
UAE Real GDP

4.2GDP Deflator
It measures the current level of prices relative to the level of prices in the base year
reflecting the change in Nominal GDP attributed to change in levels of prices rather than
rise in quantities produced
GDP Deflator= [Nominal GDP / Real GDP] X 100
Figure 12 shows change both UAE & German GDP Deflator, where UAE GDP Deflator
has been increasing during 2006-2013 period reaching 170 in 2012 up from 112 in 2006
reflecting increase in UAE's Nominal GDP attributed to change in levels of prices rather
than rise in quantities produced.
While on the other Hand, Germany GDP Deflator fluctuated between 99 to 119 in 10
years which reflecting increase in German real production levels along with normal
increase in inflation levels within German economy
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Germany 99.269 100 101.19 112.31 121.53 117.18 112.42 119.27 111.83 117.91 119.54
UAE 85.817 100 111.96 126 149.35 126.67 140.61 162.84 166.69 171.21 172.83
0
50
100
150
200
GDP Deflator

5 -Components of Gross Domestic Product
Y = C + I + G + Nx
UAE Nominal GDP Components %
German Nominal GDP Components %
Each dollar of expenditure included in the country’s GDP is placed into one of the four
components of GDP which are Consumption (C) , Investment (I) , Government Purchases
(G) and Net Exports (Nx).
10 11 16 18
8 9 6 6
18 218 8
7 6
6 6 10 9
7 7
61 62 58 58
62 61 55 59
52 50
21 19 19 18 24 24 30 26 23 23
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
UAE GDP Componants
Net Exports Gvrmnt exp household exp Investment
4 5 5 6 7 6 5 6 5 6
19 19 19 18 18 18 20 20 19 19
59 58 59 58 56 56 59 58 57 58
18 18 17 18 19 19 16 17 18 17
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Germany GDP Componants
Net Exports Gvrmnt exp household exp Investment

1. Consumption (C) reflect trend of spending by households on goods and services with
the exception of purchases of new housing.
Consumption level in UAE has been stable during last 10 years (2003-2012) at an
average of 61% of the growing GDP (nominal)
Consumption level in Germany has been stable during last 10 years (2003-2012) at an
average of 58% of the growing GDP (nominal)
Investment (I) reflect trend of spending on new capital equipment, inventories and
structures including household purchases of new housing.
Investment level in UAE has been stable during last 10 years (2003-2012) at an average
of 22% of the growing GDP (nominal) causing increase in spending on new capital
Investment level in German has been stable during last 10 years (2003-2012) at an
average of 18% of the growing GDP (nominal) causing increase in spending on new
capital
3. Government Purchases (G) reflect trend of spending on goods and services by
Federal Government and local governments.
Government purchases level in UAE was stable during last 10 years at an average of
7% of the growing GDP (nominal
Government purchases level in Germany was stable during last 10 years at an average
of 19% of the growing GDP (nominal).
4. Net Exports reflect trend of spending on Exports minus Imports.
Net Exports level in UAE has been stable during last 10 years at an average of 10% of
the growing GDP (nominal),
Net Exports level in Germany has been stable during last 3 years (2010-2012) at an
average of 5% of the GDP (nominal)

6-MeasuringCost of Living
Consumer Price Index is a measure of the overall cost of goods and services bought by a
typical consumer in the country
housing
39%
furniture
4%
medical health
1%
transportation
10%
communication
7%
recreation
3%
education
4%
hotels
5%
other goods
and service
5%
food
14%
Alchohol
tobacco
0% clothing
8%
UAE CPI Componants
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010 2011 2012 2013
UAE CPI Base Year 2007
UAE base 2007

weamref
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
UAE 3.10% 5% 6.20% 9.30% 11.10 12.30 1.60% 0.90% 0.90% 0.70%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
UAE Inflation Rate
housing
32%
furniture
5%
medical health
5%transportation
13%
communication
2%
recreation
11%
education
1%
hotels
5%
other goods and
service
7%
food
10%
Alchohol tobacco
3% clothing
6%
Germany CPI Componant

Figure 23 shows the ingredients of UAE Consumer Price Index consisting of 12 item
with 70% concentration in four items, this 70% concentration is structured as 39.3% is
Housing, 13.9% Food & Beverages, 9.9% Transportation and 6.9% Communication.
Figure 26 shows the ingredients of German Consumer Price Index consisting of 12 item
with around 70% concentration in four items, this 70% concentration is structured as 32%
is Housing, 10% Food, 13% Transportation and 11.% Cultural & recreation services.
Figure 24 shows increase in UAE Consumer Price Index (CPI) in accordance to base
year 2007, where cost of living in UAE has been growing more expensive during last 5
years. Prices jumped high in 2008 recording CPI of 112.25 with a double digit inflation
rate of 12.25% over 2007 CPI and then prices continued increasing during following
years at lower rates recording 114, 115 , 116 and 116.78 CPI in 2009, 2010 ,2011 and
1 2 3 4 5 6 7 8
Germany base 2010 93.9 96.1 98.6 98.9 100 102.1 104.1 105.7
88
90
92
94
96
98
100
102
104
106
108
Germany CPI Base 2010
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Germany 1.03% 1.666 1.547 1.577 2.298 2.628 0.313 1.104 2.075 2.008
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
300.00%
Germany Inflation Rate

2012 respectively with constant inflation rate of 0.9% in 2010-2011years and 0.7% in
2012.
The increase in UAE CPI during 2012 over
1. Beverages & Tobacco by +6.36%
2. Food & Soft Drinks by +5.24%
3. Education by +4.50%
4. Restaurants & Hotels by +4.14%
5. Textiles, Clothing & Footwear by +2.42%
6. Furniture by +2.11%
7. Miscellaneous Goods & Services by +1.63%
8. Medical Care by +1.09%
9. Transportation by +0.16%
10. Recreation & Cultural by +0.23%
11. Communication by +0.01%
Figure 27 shows increase in German Consumer Price Index (CPI) in accordance to base
year 2010, where cost of living in Germany has been increased but for the last 10 years it
is steady increase
7-Population,GDP per Capita &Unemployment
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
UAE Population Grwoth Rate8.24050612.5742716.141217.3149215.9321512.687478.9567815.5702683.0950451.514471
0
2
4
6
8
10
12
14
16
18
20
UAE Population Grwoth Rate

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
UAE GDP per capita (current US$) 34,47 32,98 34,06 36,90 40,40 43,53 45,55 44,48 46,40 33,01 34,04 39,05 41,69
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
40,000.00
45,000.00
50,000.00
UAE GDP per capita (current US$)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
UAE Unemployment Ratio 2.5 2.7 2.9 3.1 3.3 3.4 4 4 4 4 3.8
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
UAE Unemployment Ratio

Germany
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GERMANY Population
Grwoth Rate
-0.0217-0.0568-0.1128-0.1337-0.1901-0.2534-0.15320.02536-1.69130.24336
-2
-1.5
-1
-0.5
0
0.5
Germany Population Grwoth Rate
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Germany GDP per capita (current
US$)
22,94 22,84 24,32 29,36 33,04 33,54 35,23 40,40 44,13 40,27 40,40 44,35 42,59
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
Germany GDP per capita (current US$)

UAE population statistical counting started in 1975 recording population of 558
thousand structured as 36% UAE Nationals and 64% Non-Nationals.
In only 5 years by 1980 UAE population grew by 87% reaching 1 million mainly due
increase in Non-nationals representing 72% of UAE population.
In 15 years’ time by 1995, UAE has grown by 131% reaching 2.4 million individual
Structured as 24% UAE Nationals and 76% Non- Nationals.
By 2005 UAE pollution grew by another 70% reaching 4.1 million individual structured
as
In 5 years Spean of time by 2010,UAE population reached 8.2 million individual with
101% growth over 2005. Population growth rate declined during 2006-2008 recording
22%, 24% & 30% annually down from 70% in 2005 mainly due to reduced flow of Non-
nationals to live UAE as result huge increases in cost of living in UAE specially Housing
rents.
UAE population growth faced sharp decline after 2009 Economic crisis dropping to 2%
in 2009 then to 1% in 2010 due to Employment layoffs occurred in both UAE Public and
private sectors.
German population decreases all over the past 10 years and growth has sharp decrees in
2012
UAE GDP per capita its one of the highest Per capita in the world since number of
population is small comparing with other countries and production is very high with high
GDP as well, Per capita reached in 2012 41,000 which is big amount comparing with
other countries in the same population
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
8.6 9.3 10.3 11.1 10.3 8.6 7.5 7.7 7.1 5.9 5.4
0
2
4
6
8
10
12
Germany Unemployment Ratio

German GDP Per capita, as Germany has high population comparing with UAE but its
growth domestic production per capita is high almost the same with UAE as it reaches in
2012 42,500, this reflects the level of GDP of Germany as the fifth large GDP in the
world
Unemployment ratio in UAE, it is increasing every year but with a small percentage as
the increase in the worked force the number of unemployment increases,it was at 2002
2.5% and increases to be 3.8 at 2012
Unemployment ratio in Germany, Germany unemployment ratio is decreasing on
yearly basis, this is an indicator for healthy economic and increase of the vacancies in the
market but it can be also reason for decreasing number of population growth
1. Conclusion
Germaneconomyisverystable economyforthe past yearsexceptforthe last2 yearsdue to
the eurocrisisbut for otherfactorit has a stable rateswithreducingunemploymentrate
and increasingof GDPper capita.
CurrentchallengesforUAEeconomyare dependenceonoil, highandunpredictable inflation
rates,dependenceonexpatriateworkforce.UAEisfocusingondiversification of economy to
reduce dependencyonoil, increasingmanufacture,trade, tourismandagriculture.Major
investmentsinthe manufacturingindustrieshave alsobeensetuptostimulate rapid
growth.UAE governmentcontinues toinvestin infrastructure, educationandtrainingto
educate local highskilled workforce.UAEhasalready implementedpolicies toreduce the
uncertaintycaused due toinflation rate fluctuations. Itisverywell seenthatUAEis tryingto
create perfectbusinessenvironment tostimulate foreigndirectinvestment andincrease
’sconfidence.investor
The political systeminUAEinform of constitutional federation isstable,whichpositively
contributesto the growthof investmentsintothe country.The absence/lowpresence of
political componentineconomicdecisionsof the governmentisalsoaverypositive factor
for economy
Accordingto comparisonanalysisof macroeconomicindicators,investmentsinUAE’s
economylook more attractive thaninthe economyof US. Althoughthe UAEeconomyhas
higherrisks,suchriskscan be carefullyevaluatedtotake aninformeddecision.Economyof
UAE is growingfaster.Inflow of labor,highinvestmentstoGDPratio,and increasedFDIare
positive elementsof expectedfurthergrowth.

References
1-Kader, A. (2011, april 18). gulf news. Retrieved November 21, 2014. Available:
http://gulfnews.com/business/economy/diversification-raises-non-oil-share-of-uae-s-
gdp-to-71-1.795268 [accessed on 24 Nov 2014]
2- .Hvidt,M 2013, 'Economic diversificationinGCCcountries:Pastrecordand future trends',
kuwait. Available:
http://www.lse.ac.uk/middleEastCentre/kuwait/documents/Economic-diversification-
in-the-GCC-countries.pdf [accessed on 24 Nov 2014]
3- Kader, A. (2013, Dec. 13). gulf news. Retrieved November 24, 2014. Available
http://gulfnews.com/business/investment/uae-and-india-sign-crucial-investment-
protection-pact-1.1266534
4- Indexmundi . (2014). Germany Economy Profile 2014. Available:
http://www.indexmundi.com/germany/economy_profile.html. [accessed on 24 Nov
2014]
5-
http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Brochur
es/Germany/economic-overview-germany-market-productivity-innovation-2014-
en.pdf

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