'Shadow economy' in Ukraine decreas to 34% of GDP in 2016 – Economy Ministry

'Shadow economy' in Ukraine decreas to 34% of GDP in 2016 – Economy MinistryThe level of "shadow economy" in Ukraine last year amounted to 34% of GDP, decreasing by 6 percentage points (p.p.).

Those preliminary figures have been posted by the Ministry of Economic Development and Trade.

"All four methods, which are used to assess the level of the shadow economy, showed a decrease in the level compared to 2015," the ministry noted.
According to its data, the shadow economy level was reduced thanks to the consolidation of macroeconomic stability and the renewal of economic growth, improvement of the business climate due to deregulation, legalization of the labor market due to a lower social security tax.

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At the same time, the ongoing bankruptcy of banks, tension in international relations with the Russian Federation, the availability of territories not controlled by the authorities, and low confidence in the institutions of power are restraining the dynamics of unshadowing, the ministry noted.

The ministry specified calculations using the method of "public expenditures - retail turnover" showed that the shadow economy amounts to 50% of GDP, which is 7 p.p. less than in 2015. At the same time, the rate of growth of sales in the legal sector exceeded the growth rate of the population's spending on purchasing consumer goods, the ministry said.
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