Unreported economic activity, or the ‘shadow economy’, decreased last year in Europe from 19.3% to 19.0% of gross domestic product, according to a study by the card company Visa.
Thanks to an improved economic environment and the implementation of measures to combat fraud, the level of the ‘shadow economy’ could be the lowest this year in the last decade, potentially falling to 18.5% of the total GDP of the European Union, Norway, Switzerland, Turkey, and Croatia, the Visa study states.
It is also highlighted that undeclared work and unreported transactions amount to €2.175 trillion, with the highest number of unreported payments and workers in the construction and retail sectors.
The study also concludes that the ‘shadow economy’ is more prevalent in Eastern and Central Europe, where in Bulgaria, Croatia, Estonia, and Lithuania it reaches nearly 30% of GDP.
To estimate the size of the ‘shadow economy’, the authors of the study based their calculations on official macroeconomic data and statistical forecasts.
