Tweet
ARMENIA'S INFORMAL ECONOMY IS OVER 35 PERCENT: IMF
YEREVAN, November 16. / ARKA /. Armenia's informal economy is more
than 35% of its GDP, according to a supplement to an IMF report called
"Regional Economic Outlook: the Caucasus and Central Asia." The size
of the informal economy, according to the IMF, across this region is
more than 75%.
The term 'informal economy' is used to refer to economic activities
which are not conducted through legally registered bodies and are
not reported to tax and social security authorities. It is often
described as informal or unorganized sector.
According to IMF report, the main indicators used to assess the
seize of informal economies in these countries are the burden of
taxes and social insurance, labor market inflexibility factors,
the quality of institutions, the burden of regulation of financial
markets and product markets. The report believes that the impact of
tax burden is particularly high in Armenia and Georgia - about 10%
of the total size of the informal economy.
The influence of rigid labor markets is also high in Armenia and
Azerbaijan -about 15% of the total size of the informal economy. The
influence of institutional quality factor that significantly affects
the competitiveness of economy and economic growth are behind a 50%
informal economy in Azerbaijan and Kazakhstan.
The IMF recommends that these countries reduce the share of the
informal economy through improvement of business regulation system,
reforming labor market institutions, reducing the tax burden and
securing workers of informal sector with access to advanced training.
-0-
YEREVAN, November 16. / ARKA /. Armenia's informal economy is more
than 35% of its GDP, according to a supplement to an IMF report called
"Regional Economic Outlook: the Caucasus and Central Asia." The size
of the informal economy, according to the IMF, across this region is
more than 75%.
The term 'informal economy' is used to refer to economic activities
which are not conducted through legally registered bodies and are
not reported to tax and social security authorities. It is often
described as informal or unorganized sector.
According to IMF report, the main indicators used to assess the
seize of informal economies in these countries are the burden of
taxes and social insurance, labor market inflexibility factors,
the quality of institutions, the burden of regulation of financial
markets and product markets. The report believes that the impact of
tax burden is particularly high in Armenia and Georgia - about 10%
of the total size of the informal economy.
The influence of rigid labor markets is also high in Armenia and
Azerbaijan -about 15% of the total size of the informal economy. The
influence of institutional quality factor that significantly affects
the competitiveness of economy and economic growth are behind a 50%
informal economy in Azerbaijan and Kazakhstan.
The IMF recommends that these countries reduce the share of the
informal economy through improvement of business regulation system,
reforming labor market institutions, reducing the tax burden and
securing workers of informal sector with access to advanced training.
-0-