Shadow economy in Ukraine makes up for 33% of official GDP in 1Q – economy ministry

Shadow economy in Ukraine in the first quarter of 2018 went down 4 percentage points year-on-year to 33% of the official gross domestic product, the Ministry of Economic Development and Trade reports.

Gradual deshadowing came as a result of the preservation of the main features of macroeconomic stability and positive economic trends in the context of the implementation of policies aimed at expanding domestic demand, facilitated by increased income and favorable external conditions, as stated in the report prepared by the economic strategy and macroeconomic forecasting department at the Ministry of Economic Development and Trade.

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Another positive factor was the strengthening of an investment component of economic growth in the conditions of ongoing economic reforms, retained high level of business activity, and improved expectations.

"At the same time, the dynamics of deshadowing is hampered by unresolved issues that negatively affect the development of the country's economy as a whole. This, in particular, is about remaining significant challenges to the stability of the country's financial system and the existence of territories beyond government control, shaped up amid military aggression in the country's territory," the ministry's press service said.

As UNIAN reported earlier, the Ministry of Economic Development and Trade estimated shadow economy in Ukraine in 2017 at 31% of GDP.