Ukraine Shadow Economy Drops to 31% of GDP

Shadow economy in Ukraine dropped by 4% in 2017, to 31% of GDP. The de-shadowing became possible due to maintaining macroeconomic stability and business activity, expansion of domestic demand, diversification of sales markets and reduction in investment risks, the Ukrainian Economic Development and Trade Ministry’s press service said, Unian reported. Also, it became possible due to maintaining a high level of business activity in the conditions of better expectations of Ukrainian reforms in the world and reducing investment risks under the relative macro-financial stabilization and the continuation of the processes of reforming the economy. The de-shadowing process is being restrained by low public confidence in government institutions, as well as significant challenges to the financial system stability, and the fact that the Ukrainian government has temporarily lost control over certain areas in the east of the country due to the ongoing Russian aggression. At the same time, the dynamics of de-shadowing is restrained by unresolved issues, which adversely affect the development of the country’s economy as a whole.