In 2020, the shadow economy is likely to have risen by 12.0 percent to 26.9 billion euros, says economist Schneider
The volume of illegal work in Austria, which rose sharply in the previous year due to the corona crisis, is unlikely to grow any further this year. After more than 12 percent in 2020, the botch will only increase by around one percent in 2021, assumes the Linz economist Friedrich Schneider. Because Austria's economic output is likely to grow a little more, the share of undeclared work in GDP will fall below 7 percent. This is the lowest percentage in the EU.
In 2020, the shadow economy is likely to have climbed by 12.0 percent to 26.9 billion euros, or 7.2 percent of official GDP. This is the highest increase in botch in 20 years, said Schneider to the APA. In 2021, on the other hand, there will be an increase of only 1.1 percent to 27.2 billion euros – measured against the gross domestic product 6.9 percent. Also this year, the wage tax reform that has been in effect since September will push the botch, last year this effect was 800 million euros.
According to these calculations, Austria will be the country with the lowest shadow economy in the EU with 6.9 percent of GDP in 2021, closely followed by the Netherlands with 7.8 percent and Luxembourg with 8.4 percent. Bulgaria with 32.4 percent, Romania with 28.9 percent and Croatia with 29.0 percent have the highest bungling shares. On average, after an increase from 16.3 to 17.9 percent in the previous year, the botch in the EU will decrease slightly to 17.4 percent this year due to the expected economic recovery.
Historically, the volume of undeclared work in Austria has fallen more or less continuously in most years since 2005. It was not until 2020 – due to the severe corona-related recession – that there was a massive increase of 12 percent. The high level of unemployment last year was the main driver behind the botch. According to Schneider, the black economy would increase by 1.1 billion euros this year, but the wage tax cut will also reduce the increase by 800 million euros to only 300 million euros in 2021.
The biggest bungling share is made up of construction and craft businesses (including repairs) with over a third, followed by other commercial businesses and household services with a sixth, and other commercial and industrial businesses and service companies (hotels, restaurants).
