Monday, 5 March 2012

'Underground economy' quadruples in twenty years

SPAIN (Agencies) The number of people working in the 'underground economy' in Spain has quadrupled since 1980. A study by the Fundación de Cajas de Ahorros says that there were an estimated 1.4 million people doing so in 1980, and over 4 million in 2008 - the most recent figure, and well before the recession. The impact on tax revenue, according to the report, is between €30,845 million and €32,735 million per year during that period, which translates into between 5.4% and 5.6% of the country's official GDP. However, a closer percentage is about 17% of the real GDP. The increase in the 'submerged economy' for those twenty years parallels strong growth in the official, 'above board' economic activity. This last more than doubled, while the 'black economy' quadrupled. Regarding the four million 'under the counter' workers, it is perfectly possible that many of them would be working in both economies, as there is a certain tolerance of these activities in the country.

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