Source: Folha de S. Paulo - 25/11/2010

Informal production of goods and services in 2010 represents 18,6% of the country's GDP (Gross Domestic Product), according to Etco (Brazilian Institute of Competitive Ethics) and FGV. The term “underground” also includes the movement generated by activities such as drug trafficking and smuggling.

Source: Exame Portal - São Paulo / SP - 25/11/2010

The informal economy accounts for 18,6% of Brazilian GDP, according to FGV

After five consecutive years (between 2003 and 2008) growing less than the Gross Domestic Product (GDP), the underground economy - business resulting from informal enterprises not informed to the governments - starts to grow this year at the same speed as the country's formal economy , according to the Underground Economy Index.

With the 2009 revision and update for 2010, the indicator was released today by the Brazilian Institute of Competitive Ethics (ETCO), together with the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre / FGV). The total handled by the underground economy now exceeds R $ 650 billion in 2010.

According to the survey, the curve of the ratio of the index to GDP has stopped falling, showing a stabilization trend around 18,6%. "This means that, in the last three years, the underground economy has grown at the same rate as the Brazilian GDP, which is worrying for the country's economy," says the statement. The index takes into account a forecast of growth of 7,5% of GDP this year and inflation of 5% in 2010.

“The disclosure of absolute values ​​is essential to avoid having the mistaken view that the stabilization in relation to GDP is positive. Like in 2009, this year another R $ 656 billion should be left out of the formal Brazilian economy, ”says Fernando de Holanda Barbosa Filho, a researcher at Ibre / FGV and responsible for the study. In July this year, Ibre / FGV and ETCO announced that the estimated values ​​in reais, in 2009, reached R $ 578 billion, equivalent to Argentina's GDP.

In the evaluation of ETCO's executive president, André Franco Montoro Filho, the growth of the economy has a double and antagonistic effect on informality. “On the one hand, growth generates an institutional modernization that encourages the formalization of economic activities, but on the other hand, income growth increases the consumption of goods and services, including those produced in the underground economy”. "The results released indicate that the second effect has been prevalent in recent years," added Montoro Filho.

Source: Rádio Globo - 25/11/2010

The level of production of goods and services that operates informally, the so-called underground, reached about R $ 656 billion this year. The value represents more than 18,5% of GDP - Gross Domestic Product, according to an index released by ETCO - Brazilian Institute of Ethics in Competition, and by Fundação Getúlio Vargas. The calculation is based on the forecast of a 7,5% growth in GDP, inflation of 5% in 2010, and data from PNAD - National Household Survey 2009. The term underground includes, in addition to informal workers, the movement generated by illegal activities, such as drug trafficking and smuggling.

Source: O Globo Online - Rio de Janeiro / RJ - 24/11/2010

BRASILIA -The informal economy in the country reached a new mark in 2010, reaching the amount of R $ 656 billion. The 2010 Underground Economy Index, released today by the Brazilian Institute of Competitive Ethics (ETCO) and by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre / FGV), shows that informality is equivalent to 18,6% of the Gross Domestic Product and is growing in product speed. Over the past three years, it has remained stable in relation to GDP. In nominal terms, there was an increase of R $ 73 billion in the set of goods and services produced in the country outside the formal economy this year, compared to last year.

- The disclosure of absolute values ​​is essential to avoid having the mistaken view that stabilization in relation to GDP is positive. As in 2009, this year another R $ 656 billion should be left out of the formal Brazilian economy - says Fernando de Holanda Barbosa Filho, a researcher at Ibre / FGV and responsible for the study.

The economist André Franco Montoro, president of the ETCO Institute, sees with concern this growth of the underground economy at the pace of GDP, especially in 2010, when the product will expand by more than seven percentage points. And he attributes the expansion to the lack of measures focused on reducing informality.

- It was expected. The causes that lead to informality are still there: high tax burden, increasing bureaucracy - he says. He considers that the most urgent and effective at the moment is to adopt measures to reduce bureaucracy.

In a report, the ETCO Institute and IBRE / FGV highlight that “informality, in addition to its relationship with organized crime and precarious working relationships, brings direct damage to society, creates an environment of transgression, stimulates economic behavior opportunistic with a drop in the quality of investment and a reduction in the growth potential of the Brazilian economy, in addition to causing a reduction in government resources for social programs and investments in infrastructure ”.

Source: Globo News, 24/11/2010

The underground economy, which brings together activities that operate on the margins of

inspection, has been growing at the same pace as the formal economy. And this year, it should move more than R $ 650 billion. After spending five years growing less than GDP, informality has gone up.

Since last year, the so-called underground economy has moved forward. Informality brings direct damage to society. In addition to creating an environment of transgression, it reduces the growth potential of the economy.

See also:

ETCO and FGV reveal: Underground Economy exceeds R $ 650 billion in 2010 and stops fall in relation to GDP