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The Government of the Republic of Serbia

In the service of citizens

Grey economy accounts for 9 percent of GDP

Belgrade, 15 September 2004

According to a survey of annual balance sheets of Serbian companies whose combined output accounts for one-half of the country’s gross domestic product (GDP), the grey economy accounts for approximately 9 percent of GDP, the latest figures released by the Serbian Statistical Office have shown.

Assistant Director of the Statistical Office Andra Milojic told a press conference held at the Serbian government that the 2001 and 2002 surveys showed that companies tend to show lower income than is really in their annual balance sheets. Therefore, the next survey will include many illegal activities that have not been included so far. He added that the previous surveys did not include illegal activities such as prostitution, drug trafficking, or copyright and piracy violations.

According to Milojic's estimates, after including all grey economy activities in the survey, the grey economy will account for 20 to 25 percent of GDP. He explained that this enhanced number ranges from between 15 and 20 percent in all EU candidate countries.

The project analysing the grey economy will be under way by 2006. Serbia will be included in the analysis for first time this year, as part of a study of western Balkan countries, said the Assistant Minister of the Serbian Statistical Office.

In the processing industry, the grey economy made up for 4.15 percent in 2001 and 3.5 in 2002, and in the transport 1 percent and 1.2 percent respectively.

In the wholesale and retail industry, the grey economy accounted for 0.85 percent in 2001 and 0.96 percent in 2002, Milojc added.

This compares with European Union countries, where the grey economy share ranges from one to four percent at most, except for Italy, where that number stands at 15 percent.

Milojic said that that the presence of illegal economy will be reduced with better functioning of the tax system.

Assistant Director of the Serbian Statistical Office Slavko Kapuran said that citizens of Serbia spend more than 50 percent of income on food and drink (both alcoholic and soft), according to a survey made in 2003, on a sample of 4,000 households.