Shadow economy shrinks to below one quarter of GDP

Take note – story published 9 years ago

Latvia’s informal economy takes up about 23-24% of the national GDP, State Revenue Service general director Ināra Pētersone told Latvian Public Television news Friday morning. 

The chief of the tax authority said that the size of the shadow economy has not grown according to official statistics since 2012. “In fact our data show the opposite,” she added.

In line with signs of a shrinking shadow economy, Petersone also cited fewer unregistered businesses and a rise in both gross wages and the number of employed people in Latvia over a comparable period last year. 

The claim that the shadow economy is shrinking contrasts with a study by the Stockholm School of Economics (SSE) in Riga which estimated that Latvia’s shadow economy grew by 2.7% last year over its lowest point in 2012, when it accounted for 21.1% of GDP.

In 2010 the informal economy was measured as taking up 39.1% of GDP, its highest-ever share according to a previous SSE study.

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