Ukrainian economy in shadows falls to 42% of GDP in H1 2015 – ministry

The Ukrainian economy in the shadows in January-June 2015 was 42% of GDP, which is the same from a year ago, the Economic Development and Trade Ministry of Ukraine said in its study posted on the ministry’s official website.

“The processes of bringing the market from the shadows are hindered by non-resolving some problems: the large tax burden on the corporate sector along with the further reduction of economic activity of companies and the high cost of raising credits; the unfavorable external economic situation, the decline in internal demand, growth of expenses on imported raw materials due to the devaluation of the national currency and halt of economic relations with Russia,” the ministry said in the study.

The ministry said that the pace of the economy in the shadows was studied using four methods: public expenses – retail turnover with growth from 54% in H1 2014 to 58% in 2014 and return to 54% in H1 2015; loss of companies – a fall from 39% to 31% and growth to 40%; power – growth from 34% to 39% and a fall to 35% and monetary – a decline from 39% to 33% and a rise to 37%.

As reported, in 2014, the ministry assessed the level of the economy in the shadows in Ukraine at 42% of GDP, which hit the record of 2007, while in the new study the assessment for 2014 was improved to 41% of GDP.

The ministry said that in Q1 2015 the level of the economy in the shadows hit the new record of 47% of GDP.