Shadow economy in Ukraine fell by 6% YoY in the first quarter of 2017, to 37% of GDP, according to the analytical report published on the Ukrainian Economic Development and Trade Ministry’s website.
The ministry noted that the de-shadowing stemmed directly from ensuring macroeconomic stabilization and economic growth, wage growth against the backdrop of reducing inflationary pressures and improving retail performance, as well as the improvement of the country’s business climate and strengthening investor confidence in Ukraine.
At the same time, the de-shadowing process is being restrained by low public confidence in government institutions, as well as significant challenges to the financial system stability, and the fact that the Ukrainian government has temporarily lost control over certain areas in the east of the country.
In terms of economic activities, a significant pace of de-shadowing was seen in the extractive industry (from 60% in Q1 2016 to 50% in Q1 2017), wholesale and retail trade (from 48% to 43%), processing industry (from 35% to 27%), real estate (from 54% to 47%), finance in insurance (from 57% to 51%), as well as construction (from 42% to 37%). (UNIAN/Business World Magazine)