Shadow economy in Latvia expands for 2nd consecutive year in 2018: survey

Source: Xinhua| 2019-05-16 00:55:23|Editor: Mu Xuequan
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RIGA, May 15 (Xinhua) -- Latvia recorded growth of its shadow economy for a second straight year in 2018, as illicit business activity increased by another 2.2 percentage points to 24.2 percent of GDP last year, the annual SSE Riga Shadow Economy Index in the Baltic States showed.

According to the index, which on Wednesday was presented at the Stockholm School of Economics in Riga (SSE Riga), the share of grey businesses continued to expand in Latvia last year despite the country seeing sustained economic growth.

In 2017, Latvia's shadow economy grew to 22 percent of GDP from 20.7 percent of GDP in 2016, according to the survey conducted annually by SSE Riga professor Arnis Sauka.

In an interview with public television on Wednesday, Sauka pointed to a rise in illegal immigration, which is fostered by increasingly severe labor shortages in Latvia.

Citing the latest Shadow Economy Index, Sauka said that illegal employment was becoming an increasingly widespread problem along with the already known issues like undeclared wages and income. Illegal immigrants make up a significant proportion of the labor force working in Latvia unbeknownst to authorities.

"There might be some 17,000 illegal workers in Latvia. Somewhere between 15,000 and 20,000, it's hard to tell. According to Border Guard's data, around 60 percent are employed in construction, others are scattered across other sectors," the expert said.