Informal economy quadruples EU average

Informal economy quadruples EU average

ANKARA - Anatolia News Agency
Informal economy quadruples EU average

The informal economy has shrunk significantly, Finance Minister Şimşek says.

Turkey has come a long way in its struggle against the unregistered economy but still lags behind Europe, Finance Minister Mehmet Şimşek said yesterday at a press meeting where he disclosed the results of the action plan regarding combat against the informal economy in first nine months of the year.

The share of the informal economy dropped 5 percentage points to 27.7 percent, nearly four times larger than the European Union (EU) average, between 2002 and the end of 2011, Şimşek said citing a study conducted by Professor Friedrich Schneider of the Austrian Johannes Kepler University.

“This is a non-negligible success,” he said, adding that the shrinkage in the size of the informal economy, thanks to very important ministerial measures, can be observed.

Yet, he admitted that the relative size of Turkey’s informal economy is too large compared with an average rate of 7 percent in EU countries.

The goal of the government in the long run is to reduce the rate to the European average, he added.
Touching on unregistered employment, a component of the informal economy, he said, the rate fell to 40.4 percent as of June 2012 from 52.1 percent in 2002, according to the Turkish Statistical Institute (TÜİK).
Three committees have been established to facilitate monitoring and assessment of the combat against the informal economy, two of which are headed by Deputy Prime Minister Ali Babacan and Prime Minister Recep Tayyip Erdoğan separately, he said.

Şimşek said 55 percent of the action plan will be completed by the end of 2012 and the whole plan will be completed next year. The action plan went into effect December 2011.