Economy ministry: Shadow economy in Ukraine drops to 34% of GDP

"According to the ministry's preliminary estimates, shadow economy in 2016 was estimated at 34% of the official GDP, which was 6 percentage points down against 2015," the report said.

Read alsoUkraine's Vice PM: economy out of shadows at record paceThe ministry noted that the de-shadowing stemmed directly from ensuring macroeconomic stabilization, resumed economic growth and lower inflation, the improvement of the country's business climate through deregulation and increased investment, as well as the legalization of jobs by reducing the single social contribution.

At the same time, the de-shadowing is restrained by the current threats in the financial system as a result of the bankruptcy of banks and their withdrawal from the market, the ongoing Russian aggression and occupation of Ukraine's territories, as well as low public confidence in the institutions of power, the report said.

Read alsoUkraine's Central Bank says almost $11.5 bln in circulation outside banksIn terms of economic activities, a significant pace of de-shadowing was seen in the extractive industry (from 51% in 2015 to 43% in 2016), real estate (from 48% to 43%), processing (from 43% to 34%), transportation (from 39% to 33%), finance and insurance (from 35% to 30%), wholesale and retail trade (from 35% to 24%), construction (from 30% to 23%), and agriculture (from 12% to 9%).

As UNIAN reported earlier, the shadow economy in 2015 amounted to 40% of the country's GDP.

According to official data, the shadow economy accounted for 34% in 2011-2012, which was a six-year low.