Informal economy grows 1% in the first half, reveals FGV and Etco
Source: InfoPessoal - SP - 01/12/2009
SÃO PAULO - The underground economy - production of goods and services not reported to the government - grew by 1% in six months, between December last year and June this year, as a proportion of GDP (Gross Domestic Product).
According to the data, with the crisis, tax collection fell substantially, reducing the growth stimulus of the underground economy, which was also hampered by the fall in economic activity.
The data are part of research by FGV (Fundação Getulio Vargas) and Etco (Brazilian Institute of Ethics in Competition) released this Tuesday (1).
Results
However, between June 2008 and 2009, production not reported to the government increased by 21,5%, with an increase of 22,6% over the proportion of GDP.
What tends to favor the underground economy, according to the study, is the reduction in world growth, which reduces Brazilian exports, and the increase in perceived corruption.
The underground economy includes tax evasion, social security contributions, compliance with labor laws and regulations. In addition, it relates to the production of goods and services not reported to the government deliberately, in order to avoid costs arising from compliance with applicable rules in the activity.