Informality advances, but at a slower pace

Falling interest rates, the slow recovery of formal employment and activity are beginning to contain the more rapid growth of the informal economy.

Source: Estadão Content
17/12/2019

Falling interest rates, the slow recovery of formal employment and activity are beginning to contain the more rapid growth of the informal economy. Despite being on the margins of legality and the payment of taxes, the informal economy has played an important role in guaranteeing some income for the large mass of unemployed people that exist today in the country. In 2019, the informal economy advanced for the fifth consecutive year, but in slower pace than the previous one. In 12 months until June, the informal economy generated the equivalent of 17,3% of the country's Gross Domestic Product (GDP). It is still a very significant portion of the economy, the largest in the last eight years and corresponding to R $ 1,2, XNUMX trillion. However, this year there is the first sign of a slowdown. This is what the Underground Economy Index (IES) points out, calculated by the Brazilian Institute of Economics (Ibre) of the Getúlio Vargas Foundation (FGV) in partnership with the Brazilian Institute of Competition Ethics (ETCO). In the criterion used by FGV, the underground economy includes the production of goods and services not declared to the government to evade taxes and contributions in order to reduce costs.

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