Georgia Among The Countries With The Highest Share Of “Shadow Economy”
The average size of the shadow economy of the 158 countries over 1991 to 2015 is 31.9%, while Georgia is among the countries, where the size of shadow of economy is the largest in relation to GDP – according to the research conducted by International Monetary Fund, in Georgia, the size of shadow economy in relation to GDP is 64.9%. With such a rate, Georgia stands next to Zimbabwe (60.6%) and Bolivia (62.3%).
Austria is the country with the lowest shadow economy, which is only 8.9%. Country number two on the list is USA with 8,3% and number three is Switzerland with 7.2%.
New results of IMF research on the shadow economy for 158 countries all over the world are presented over 1991 to 2015. The same source reveals that in 2015, the shadow economy size in Georgia reduced to 54.07%.
According to IMF, shadow economy includes all economic activities which are hidden from official authorities for various reasons. Avoiding taxes and bureaucratic mechanisms is among the reasons.
To measure shadow economy, International Monetary Fund used statistical data of different countries, surveys and the balance between household incomes and consumption.
The OECD countries are by far the lowest with values below of 20%. The average decline from 1991 to 2015 was 5.3 percentage points. According to the research, high income countries have the lowest shadow economy and low income countries vice versa.
In Georgia’s neighboring Azerbaijan, the size of shadow economy is 52.19%, in Armenia – 42.59%, in Turkey – 31.38% and in Russia – 39.73%.