For the first time since 2016, the share of the shadow economy in Latvia decreased by 1%

For the first time since 2016, the share of the shadow economy in Latvia has decreased. One percent.

Instead of the previous 26.6% of the gross domestic product in 2022, the share was 26.5%, the Leta agency reported, citing the director of the business center for sustainable development at the Riga Higher School of Economics Arnis Sauku. The results of the study show that in Latvia the main contribution to the “shadow” in 2022 was made by “envelope salaries” – that is, payments to employees that entrepreneurs hide from the state. Money in envelopes accounted for 46.7% of the total shadow economy.

The share of unspecified income (profit) in Latvia was 16.3%. The declaration of dead souls or unspecified workers in 2022 rose to 11.1%. The turnover of unregistered entrepreneurship amounted to 8.5%. The overall level of bribery (the percentage of income that enterprises allocate for unofficial payments to “settle things”) increased to 9.4%. All these figures speak of a rather primitive management model presented in the Latvian economy, and a high level of state corruption, when any state official can be bought.

As previously reported EADaily, Lato LapsaLatvia’s most famous journalist, is intensely looking for “the iceberg that the country ran into in the dark”:

“Ten years ago, there was a feeling that everything in the country was going uphill. There were a lot of problems, but Latvia somehow moved forward. Everything is going backwards now.”