Brazilian economy not included in the GDP account is larger than Denmark


UOL - São Paulo / SP - ECONOMY - 10/07/2013

Matthew Lombardi

From UOL, in São Paulo

The Brazilian “underground” economy, one that is not counted in the Gross Domestic Product (GDP) account, moved in 2012 more than the entire economy of Denmark, according to a study released on Wednesday (10) by the Brazilian Institute of Ethics in Competition (ETCO).

In addition to the informal market, the indicator calculates everything that moves in the country, but is not officially reported to the government. For example, a factory that produces 100 pairs of shoes and declares only 90 to the government, collaborates with 10 pairs for the “underground” economy.

According to the study, the “underground” economy generated R $ 730 billion in 2012, about 16% of the country's Gross Domestic Product. Denmark's economy moved around R $ 715 billion in the same period.

Rate of decline in informality slows

The indicator had a reduction in relation to the percentage of GDP registered in 2011, going from 21% of the country's economy to 16%. However, there was a slowdown in the pace of the decline.

"This slowdown is basically due to the drop in formal hires by the industry and the growth of the service sector, which is labor intensive and very dynamic, but has higher levels of informality than the industry," said the researcher from IBRE / FGV Fernando de Holanda Barbosa Filho, responsible for the research.

The economist points out that, despite the reduction in the rate of decline of the index, the result is still positive. "It is necessary to take into account that, despite the low performance of the economy in the year, informality continues to fall," he says.

Economy grew 0,9% in 2012, the worst year since 2009

The Brazilian economy grew 0,9% in 2012, the worst annual performance since 2009, when it shrank 0,3%. In 2011, there was an increase of 2,7% and, in 2010, 7,5%.

In current values, GDP reached R $ 4,403 trillion in 2012. GDP per capita reached R $ 22.402, remaining practically stable (0,1%) in relation to 2011.

Considering the three sectors of the economy, services was the only one that presented a positive performance in the accumulated in 2012, with an increase of 1,7%. In turn, the industry shrank 0,8% and agriculture fell 2,3%.

UOL - São Paulo / SP - ECONOMY - 10/07/2013