The share of the shadow economy in Latvia decreased to 21.4% / day last year

At the same time, the share of the shadow economy in Estonia has increased from 17.9% of GDP in 2023 to 19.5% of GDP in 2024, but in Lithuania in 2024 the shadow economy has decreased by 1.7 percentage points compared to 2023 and accounted for 24.7% of GDP.

The results of the shadow economic index study show that in Latvia the most important component of the shadow economy in 2024 was « envelope wages », which in Latvia accounts for 50% of the total shadow economy.

In turn, another component « Unsamed Revenue » in Latvia accounted for 23.6% of the overall shadow economy, while the component of « unspecified employees » – 26.4%.

The average salary of entrepreneurs hiding from the state or envelope wage decreased in Latvia by 2.9 percentage points in Latvia compared to 2023 and was 20.7%.

In the field of income or profit, in 2024, compared to 2023, Latvia was increasing by 0.6 percentage points – not showing income from 14.6% to 15.2%.

In Latvia, the non -existence of employees in 2024 accounted for 10.9%, showing a reduction of 0.8 percentage points compared to 2023.

The results of the study show that the overall bribery level, or percent of the income paid by companies in unofficial payments to « settle things », decreased by 0.7 percentage points in Latvia in 2024 in Latvia, accounting for 9.3%.

In Latvia in 2024, the average percent of the contract increased compared to 2023 to secure the public order, from 7.5% to 7.8%.

Among the sectors, the highest share of the underground economy in Latvia remained in construction – 33.8%, which is a reduction of 0.4 percentage points compared to 2023. The share of the shadow economy in Latvia last year was 26.2%, while in 2023 the figure was 27%, in the service sector – 23.6%(26.4%in 2023), in production – 17.3%(18.9%in 2023) and wholesale remained at 13%or the same as in 2023.

On the scale of one to five in Latvia, satisfaction with the state tax policy has increased from 2.6 in 2023 to 2.65 in 2024.

Last year, entrepreneurs’ satisfaction with the quality of business regulation has also increased slightly, from one to five in Latvia, it has grown from 3.04 2023 to 3.06 last year.

Satisfaction with government support for entrepreneurs on a scale of one to five in Latvia has decreased to 2.52 in 2024 (2023 – 2.57).

Entrepreneurs’ satisfaction with the work of the State Revenue Service on a scale of one to five last year in Latvia increased to 3.6 (in 2023 – 3.47).

A study by Riga Economics Higher Education Institution « The Shadow Economic Index in the Baltic States » is set once a year using surveys of businessmen in the Baltic States. The authors of the study are Professor Talis Putnins, Professor of the School of Economics in Riga. In order to calculate the shadow economy in a percentage of GDP, the index includes calculations for non -registered business income, unregistered or hidden employees, and non -« envelope » salaries.