Problems of the Ukrainian economy reduce its informal sector

Проблемы украинской экономики сокращают ее теневой сектор

For the first nine months of 2018, the share of the shadow economy dropped to their lowest in ten years.

During January-September of last year the economy declined by 1 percentage point and made up 32% of official GDP. According to the Ministry of Finance, to reach a record for the last ten years was possible thanks to the reforms aimed at increasing the incomes of the population, deregulation of markets and the high level of business activity.

According to the Director of the Ukrainian Association of trade networks suppliers Oleksiy Doroshenko, the reduction of the shadow sector of the Ukrainian economy due to reduced size of the domestic market due to falling purchasing power of citizens.

Another reason for the reduction of the shadow economy – labor migration. Every year in Ukraine is continuously decreasing the number of workers because people massively go abroad in search of better paying work. Many of them before moving worked illegally at home. The decrease in working illegally leads to a decrease of the informal sector.