Level of shadow economy in Ukraine down to 31% of GDP in nine months of 2021

The level of the shadow economy in Ukraine in January-September 2021 amounted to 31% of GDP, which is 1 p.p. less compared to the corresponding period in 2020, the Ministry of Economy said on its website, citing preliminary calculations.

"According to the preliminary calculations of the Ministry of Economy, the level of the shadow economy in January-September 2021 amounted to 31% of the official GDP, which is 1 percentage point less than the corresponding period in 2020," the ministry said.

A slight decrease in the level of the shadow economy occurred against the background of the adaptation of businesses to work in unpredictable conditions during quarantine restrictions, the ministry explained.

According to its materials, two classical methods recorded an increase in the "shadow" level for the nine months: by the electric method – by 2 percentage points, up to 27% of GDP, by the monetary method – by 1 percentage point, up to 32% of GDP.

According to the electric method, the trend towards an increase in the level of the shadow economy continued against the backdrop of an increase in demand for energy resources and a rise in economic activity, an increase in domestic investment demand and the preservation of a favorable environment in foreign markets, as well as relatively high growth rates in such energy-intensive industries as metallurgy and engineering, the Ministry of Economy noted.

As for the monetary method, the ministry admits that with new models of consumer behavior, non-traditional non-cash shadowing channels have formed, which are not yet fully covered by this method of calculation.

At the same time, the "spending of the population, retail trade and services" method showed a reduction in the "shadow" by 2 percentage points – to 21% of GDP, and the method of unprofitability of enterprises – by 11 percentage points, to 21% of GDP.

However, the ministry admits that the "spending of the population" method does not cover "shadow" websites, which, due to quarantine restrictions, have replaced unorganized physical trade points.

Among the factors that hinder shadowing, the ministry named the low level of property protection, the insufficient level of protection of intellectual property, the high level of corruption, the imperfection of the judicial system and the presence of uncontrolled territories in the country.

Source: www.en.interfax.com.ua