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The shadow economy in Russia: where does oil revenues

30 August 2019

The shadow economy in Russia: where does oil revenues

Experts of “MK” has provided public survey data that indicated that the dark side of the economic sector of the country is approximately 40% to 50%. Calculations were made quite problematic, while the study used balance sheet methods and evaluation expertise. Also, scientists are not spared and indirect information (the opinion of the masses). The essence of the study was in understanding the percentage of informal production in the Russian Federation, starting in 2017. The figures obtained struck. Share hidden from the public in the shadow economy amounted to more than 13% of GDP, namely 11.8 trillion rubles.


Most of the shadow out of financial operations, real estate indexes represent about 6.3% of GDP. Next is fishing, hunting, agriculture, repair of vehicles, retail and wholesale trade and small unregistered business, these industries occupy about 0.9% of GDP. During the study, it was difficult to calculate the consequences of criminal activity that includes drug trafficking, prostitution, profiteering weapons and more.


When compared with the figures from 2014 to 2015, the level of shadow economy is reduced. If earlier figures were 13.8% of GDP, now has dropped to 12.7% of GDP. Although this does not indicate a decrease in the absolute volume at market prices, the improvement is still observed.


Alex Barb is a Professor at Financial University under the Government of the Russian Federation, the calculations he came to the conclusion that the General opinion regarding the shadow economy is incorrect. Barb believes that the government deliberately sets a lower price. If to compare to indicators of the European Union, Russia is at a high level and will soon move threshold. Indicators in the former CIS countries account for 20% to 40%, it is not surprising is that the shadow Finance income is through areas such as: real estate, construction and repair services, rental housing, agriculture, manufacturing of food products from private plots (cucumber, tomatoes, cherries, strawberries, potatoes).


About 40% of the working class of Russia, completely or partially involved in the structure of the shadow economy is characterized by low productivity. Given the fact that Russia is subjected to numerous sanctions, the standard of living is falling, the Russians are forced to seek the most efficient (quality and price) of housing options, products, life and power, as well as cheap products manufactured in underground workshops.

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