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THE SHARE OF SHADOW ECONOMY KEEPS LEVELS OF APPROXIMATELY 20% OF THE OFFICIAL GDP

23.08.2011

The Ministry of Finance prepares series of analyses of the good practices in the sphere of assessment and modeling of the shadow economy.

The share of the informal sector in the Bulgarian economy is around 20% of the official GDP in the period 2000 - 2009. This result is according to preliminary assessments and expert opinions of the Ministry of Finance that are prepared in accordance to energy consumption method for the respective period in Bulgaria.

The conclusions of the first detailed institutional analyses would be published in the middle of September this year.

The preliminary estimations take into consideration the effects upon the energy consumption resulting from the price dynamics of the energy goods, the economy structure and the technology advances. This method has been chosen due to specific basic structure and preciseness on reflecting the dynamic changes of the shadow economy. The preliminary results are illustrated below, which represents that the share of the shadow economy has reached approximately 20% of the official GDP in Bulgaria, in the last few years. The analysis deals with the period up to 2009 due to the fact that the official statistical data of the energy consumption for a subsequent period is currently not available.

The first part of the analysis focuses on the alternative analytical approaches for measurement and modeling of the phenomenon \"shadow economy\", as well as outlines the four most common definitions for shadow economy (fiscal, market, legal and statistical meaning of the term) and four main approaches for measurement and modeling of the shadow economy - Currency demand approach; Energy consumption; \"Formal economy index\", as well as some empirical models analyzing the shadow economy - a structural formula for estimation of corruption and informal economy as well as the MIMIC (Multiple Indicator Multiple Cause) model.

In the first analysis of the series the international experience for prevention of the shadow economy is thoroughly presented, through implementation of the electronic payment systems. The prevention initiatives in Bulgaria are accordingly studied.