Underground Economy falls to 16,8% of GDP
Confirming the downward trend of the last eight years, when it began to be measured, the Underground Economy Index (IES), released in the first week of July, reached the mark of 16,8% of GDP. Disclosed by ETCO in conjunction with the Brazilian Institute of Economics of Fundação Getulio Vargas (IBRE / FGV), IES, in absolute values, reached R $ 695,7 billion in 2011.
The positive data, however, come with an alert: one of the main responsible for the successive falls of the IES, the growth of formal employment, should be close to the limit in 2012.
“Although the pace of economic growth has slowed, the formal job market is still very heated. However, our forecast is that this warming has reached its institutional limit and will be stagnant for some time starting in 2012 ”, says IBRE / FGV researcher Fernando de Holanda Barbosa Filho, responsible for the study. He explains that "the stagnation of the labor market should reduce the downward trend of HEI in the coming years".
For ETCO's chief executive, Roberto Abdenur, with this tendency of stagnation in the labor market, “reaching the levels of developed countries - where IES is around 10% - seems more distant”. But, based on the history of the level of informality and the confidence that there will be a resumption in the country's growth from 2013, he estimates that Brazil may reach this level at the end of the decade.
“We are living in a unique moment in our economic history, a favorable moment for the revision of a series of rules that have historically been preventing the healthy growth of our economy. Rules that push small entrepreneurs into informality, which indirectly favor the production and trade of illegal products and facilitate tax fraud, ”says Abdenur, referring to excessive bureaucracy, high interest rates and excessive taxes in the country .
What is the Shadow Economy Index
ETCO believes that knowing the size of the problem is critical to tackling it. Much is said, but little is known about informality, piracy and evasion, as, as illegal activities, they are difficult to measure. ETCO, in conjunction with the Brazilian Institute of Economics of the Getúlio Vargas Foundation (IBRE-FGV), has since 2007 released the Underground Economy Index, a study that estimates the values of activities deliberately not declared to public authorities in order to evade taxes, and those of those who find themselves in the informal sector due to excessive taxation and bureaucracy.
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