Analytics, Baltic, Financial Services, Legislation, Markets and Companies, Shadow economy

The most important components of shadow economy in Latvia are illegal wages (45.5%), unreported income (37.2%) and unreported employees (17.4%).

Shadow economy has risen in all Baltic states. In Lithuania shadow economy was 18.2% of GDP, growing by 1.7 percentage points year-on-year, while in Estonia it was 18.2%, growing by 2.8 percentage points.

The Latvian Chamber of Commerce and Industry (LCCI) and the Stockholm School of Economics in Riga (SSE Riga), in cooperation with the Ministry of Finance and BASE (Business Against the Shadow Economy) association, is organizing the eighth consecutive year an annual conference dedicated to reducing the shadow economy in Latvia.

According to the previous study, share of shadow economy in Latvia in 2016 was 20.3% of the gross domestic product (GDP), which was by 1 percentage point lower than in 2015. Shadow economy in Lithuania in 2016 was at 16.5% of GDP, up 1.5 percentage points from 2015, while in Estonia it was 15.4%, up 0.5 percentage points.

Shadow economy has risen in all Baltic states. In Latvia, shadow economy was 22%, growing by 1.3 percentage points year-on-year, while in Lithuania it was 18.2%, growing by 1.7 percentage points.