Eustat places the underground economy in the Basque Country at 8.7% of GDP

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The underground economy represented 8.7% of the Basque Country’s GDP in 2020, representing 6,214 million euros, with prevalence in construction, commerce, hospitality and transport. This is the figure produced by Eustat’s first estimate of the productive activities that are hidden to avoid paying taxes or Social Security contributions. Come on, what can be described as the ‘without VAT’ economy.

The Department of Economy of the Basque Government, led by Pedro Azpiazu, has highlighted that the figure is half the European average, located at 17.3%, according to data from the latest report (corresponding to 2021) prepared by Friedrich Schneider, the most recognized firm in this field. This study assigns 16.9% to Spain.

However, there are very different estimates in relation to the underground economy. The Urkullu government itself commissioned a study from the Institute of Public Economy of the Basque Country that estimated undeclared activity at 11,000 million euros, 17.4% of GDP.

Returning to the Eustat report, the sector in which the greatest volume of underground economy is estimated is construction, where it is believed to have accounted for 23.9% of its activity. Behind, the sector that groups commerce (including vehicle repair), hospitality and transport generated 17.1% of its wealth in a hidden way. In real estate activities, the black flow accounted for 14.7% of the total GVA generated; in other service activities, 14.1% of the sector, and in professional activities, 10.1%.

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In the rest of the sectors, submerged activities have a much more moderate contribution, such are the cases of information and communications with 5.7%, and Industry and energy with 4.9%, the Primary sector with 2, 6% Finally, in the market share of the education, health and social services sectors, it is estimated at 2.2%.

In relation to the total value of the underground economy, the services sector is the one that makes the greatest contribution, with 74.1%. In turn, within this chapter stands out ‘Commerce, hospitality and transport’ with 32.9% and, in second place, ‘Real estate activities’, although at a considerable distance, with 19.4%.

With respect to the rest of the large sectors, the ‘Construction’ sector stands out, which accounted for 13.9% of the total underground economy and the ‘Industry and energy’ sector with 11.8%.

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