Undercover research estimates Romania's hidden economy to account for 13.1% of its total GDP
Revised Article:
The Romanian underworld economy, known for its clandestine dealings, has been on a steady decline in recent years, dipping to 13.1% of the country's GDP in 2023 – just one point above the global average. This dramatic drop is a significant shift from the 31.3% of GDP it accounted for back in 2000, and 19.5% in 2013, according to a global study by EY, a renowned consulting firm.
The questionable aspect of these statistics, as per Alex Milcev, Partner and Head of the Tax and Legal Assistance department at EY Romania, revolves around the quality and source of the data they rely on. In a press release, Milcev stated, "Roughly one-eighth of our GDP belongs to the underworld economy, according to EY's global study Shadow Economy Exposed: Estimates for the World and Policy Paths. The encouraging bit is that its share in the total economy has been diminishing year by year, as part of a trend spanning over two decades."
The EY study scrutinized the hidden economy in 131 countries over a span of 23 years (2000-2023). In the report, it is noted that while Romania's contribution to this global analysis is not exceptional, the country is left lingering at the bottom of the EU ranking.
Still, the reliability of these statistics has been a topic of contention due to inconsistencies in methodology and the opacity of data. Definitions of informality differ widely among studies, ranging from undeclared labor to unregistered businesses. Additionally, the use of surveys or indirect indicators, such as electricity consumption, can introduce uncertainty, especially given the evolving dynamics in the digital services sector.
Moreover, recent market volatility following the 2025 elections has highlighted how political shifts can disrupt both formal and informal sectors, making accurate, real-time assessments difficult. Lastly, the World Bank's findings on firm-level markup disparities suggest that informal practices might persist unevenly across sectors, confounding aggregate estimates.
By and large, while regulatory improvements and EU integration are indeed curbing informality, measurement challenges persist due to Romania’s complex economic landscape and dynamic political risks[4].
- The decrease in Romania's underground economy, responsible for 13.1% of the country's GDP in 2023, as reported by EY, has caught the attention of finance and business sectors.
- Reading the EY study, one can find that Romania's contribution to the global hidden economy analysis is not exceptional, but the country continues to struggle at the bottom of the EU ranking.
- In an effort to obtain accurate data on Romania's underground economy, it is crucial to consider factors such as the changing dynamics in the digital services sector, the inconsistencies in methodology, and the ongoing political risks that contribute to measurement challenges.
