IMF Says Greece’s Informal Sector Shrinking

Greece’s informal sector has shrunk significantly over the past few years, according to a report at the IMF.

The informal sector, which is comprised of economic activity that happens outside of government sanctioned channels, did temporarily increase during the sovereign debt crisis and the COVID-19 pandemic, but overall has noticeably shrunk.

The trend is considered important because, according to the IMF, informality is considered a structural impediment for economies.

“Lower informality is found to be associated with higher subsequent per capita GDP growth and higher tax revenue,” says the report entitled: Recent Trends of Informality in Greece: Evidence from Subnational Data.

The country’s efforts at digitalization and combatting tax evasion seem to be bearing fruit and reducing the size of informality, yet more work needs to be done to push through pro-growth structural reforms and to further accelerate digitalization, says the IMF.

Source: tovima.com