FGV: informal economy grows 8,7% in 2007

By ETCO

Source: Gazeta do Povo, 18/04/2008

FGV: informal economy grows 8,7% in 2007

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FGV: informal economy grows 8,7% in 2007

By ETCO

Source: A Tarde Online, 17/04/2008

The growth of the informal economy in 2007 was 8,7%, higher than the performance of the country's Gross Domestic Product (GDP), of 5,4%, as measured by the Brazilian Institute of Geography and Statistics (IBGE). The numbers, the result of a survey commissioned by the Brazilian Institute of Ethics in Competition (Etco) from Fundação Getúlio Vargas (FGV), show that the performance of the informal economy was 61% better than that of the formal economy. informal economy since 2003. In that year, informality grew by 15%, while GDP increased by only 1,1%. In 2004, the informal economy fell by 21,5%; GDP increased by 5,7%. In 2005, informality started to recover and grew 10,8%; in the same year, GDP increased by 3,1%. In 2006, informality rose 4,1%; GDP, in turn, increased by 3,7%. FGV pointed out that between 2003 and 2006, the factor that most encouraged the growth of the informal economy was the level of activity. In 2007, however, the tax burden became the indicator that most favored the growth of informality. In the survey, FGV decided to use the term “underground economy”, defined as the production of goods and services that is not reported to the government. , with the objective of evading taxes, avoiding the payment of social security contributions, evading compliance with labor laws and regulations and not paying the costs resulting from complying with rules applicable to a certain activity. Illegal activities, such as drug trafficking, prostitution and smuggling, for example, were not included in the entity's calculation. 

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FGV: informal economy grows 8,7% in 2007

By ETCO

Source: Portal Exame, 17/04/2008

(Agência Estado) The growth of the informal economy in 2007 was 8,7%, higher than the performance of the country's Gross Domestic Product (GDP), 5,4%, as measured by the Brazilian Institute of Geography and Statistics (IBGE) . The figures, the result of a survey commissioned by the Brazilian Institute of Ethics in Competition (Etco) from Fundação Getúlio Vargas (FGV), show that the performance of the informal economy was 61% better than that of the formal economy.

The FGV survey disclosed the performance of the informal economy since 2003. That year, informality grew by 15%, while GDP grew by only 1,1%. In 2004, the informal economy fell by 21,5%; GDP increased by 5,7%. In 2005, informality started to recover and grew 10,8%; in the same year, GDP increased by 3,1%. In 2006, informality rose 4,1%; GDP, in turn, increased by 3,7%.

FGV pointed out that between 2003 and 2006, the factor that most encouraged the growth of the informal economy was the level of activity. In 2007, however, the tax burden became the indicator that most favored the growth of informality.

In the survey, FGV decided to use the term “underground economy”, defined as the production of goods and services that is not reported to the government, with the objective of evading taxes, avoiding the payment of social security contributions, evading compliance with laws and labor regulations and not pay the costs arising from complying with rules applicable to a particular activity. Illegal activities, such as drug trafficking, prostitution and smuggling, for example, were not included in the entity's calculation.