Greece’s ‘shadow economy’ ranked first in the world estimated at 21.5% of gross domestic product (GDP) a study by the Institute for Applied Economic Research at the University of Tubingen in Germany revealed, according to Forbes publication.
The study, which was recently published in Forbes, defines a shadow economy as undeclared earnings from illegal activities, bribery money, undeclared labour and business transactions that don’t follow legal procedures and where no taxes are paid.
The study charts 12 developed economies, including the United States, Norway, United Kingdom, Japan, Canada and Germany, noting that a shadow economy can only be estimated indirectly.
According to the publication, shadow economies cost nations worldwide trillions of dollars every year, with analysts estimating that it is the second largest economy.
These findings show the Greek shadow economy is estimated to average 21.5% of GDP, followed by Italy and Spain with shadow economies of 19.8% and 17.2% of GDP respectively. The United States is at the bottom of the chart with a 5.4% shadow economy.
“Today, many countries in southern Europe have booming shadow economies with Greece especially notable, though the scale of underground activity can only be measured indirectly,” states Forbes.