Thе policy brief presents the dynamics and the components of the Hidden Economy Index 2010. It also examines the recent trends in the Bulgarian economic development and expected effects on the informal sector.
The dynamics of the hidden economy is an important indicator of the state of a country’s institutions as well as of its competitive potential. The hidden economy has a serious impact on private sector activities, the productivity and competitiveness of the workforce, on economic development and growth, as well as the social security and support systems of the country. According to different estimates about a third of the world’s GDP is within the “shadow turnover”. It is argued that the current financial and economic crisis will result in an increase in the hidden economy in most European countries. The recent debt crisis in Greece has exposed drastically the need to better account for and to grasp the implications of the existence on large hidden economy on economic performance. This is even more pressing in the light of achieving Europe 2020 results and calculating each country’s contribution to the European Stability Mechanism and the Euro Plus Pact.