The size of the shadow economy of Ukraine is about 45% – IMF report

The volume of shadow economy of Ukraine is on average 44.8% of GDP.

This is stated in the report of the economist, Leandro Medina from the African Department of the IMF and Friedrich Schneider from the University of Kepler, published on the website of the International monetary Fund, reports the Economic truth.

The study says about the state of the shadow economy in 158 countries during 1991-2015 period. The authors point out, as its amount has varied from year to year. The average size of the shadow economy in the world is 31.9% of GDP.

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According to the report, in 1991, the shadow economy in Ukraine amounted to 38,96% of GDP in 2015 and 42.9%. The highest figure was recorded in 1998, 57%, and the lowest – in 2008 (38,96%). After the global financial crisis, the shadow economy of Ukraine began to grow and eventually reached 42.9% of GDP in 2015. Average rate of Ukraine is 44.8% of GDP.

In developed countries the shadow economy is 7-15% of GDP (USA, Netherlands, Japan, Switzerland, Singapore).

In Russia the average shadow economy is 38.4%, in Azerbaijan – 52,19%, Armenia – 42,59%, Georgia – 64,87%, Moldova – 43,43%. In Poland, the size of the shadow economy at an average of 25.1 per cent, Lithuania – 25,15%, Latvia – 22,23%, Estonia – 23.8% of GDP.

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The authors of the study used the definition of the Organization for economic cooperation and development in 2016, which takes into account the “unobserved” sectors of the economy, including illegal activity (GDP attributable to purely criminal activities), “statistical underground” (a legitimate, but an economy that is not calculated by statistics), production for own use household methods explicitly take into account the “shadow” created for tax evasion.

This work is the first systematic application of new statistical methods for the estimation of the shadow economy that developed in the years 2010-2017 in economic science.

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Earlier it was reported that in 2016, the volume of shadow economy in Ukraine amounted to 1.1 trillion hryvnia. These are the findings of a study by the international Association of chartered certified accountants, referred to by the author of the publication DT.UA Sergey Slezi. He reminded that GDP in the same year amounted to 2.38 trillion UAH, and the revenues of the state budget was determined by the amount of 595 billion. With the amount of 1.1 trillion hryvnias of taxes and contributions to the budget are not paid.

The author has noticed that with the same period in 45,16% Ukraine took the third place in the list of countries with the largest shadow economy in the world. Above this percentage is only Nigeria and Azerbaijan.

  • economy
  • GDP
  • IMF
  • shadow economy

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