Experimental statistics

Non-observed economy

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Assessments of non-observed economy in Lithuania

Considering the needs of national and the European Union (EU) consumers, Statistics Lithuania carries out assessments of the officially undeclared economy.

Within the EU Statistical System, the term ‘non-observed economy’ (NOE) is recommended for use in the field of macroeconomic statistics, and in particular national accounts. The concept of NOE is not identical to the concept of "shadow economy" which is widely used in society. The shadow economy can be analysed from different perspectives: legal, budgetary and statistical. From a statistical point of view, the shadow economy (namely NOE) is analysed and assessed as part of GDP, which, by its economic meaning, should be included in the scope of the components of GDP, but is excluded from the scope of statistical sources of information for various statistical and/or economic actor-dependent reasons. NOE covers part of the economic performance results that are not available in direct sources of information used for GDP measurement but are indirectly included in GDP in order to ensure the completeness and comparability of this indicator across countries.

In all EU Member States, national accounts are prepared in accordance with Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national and regional accounts in the European Union. The provisions of this Regulation require a detailed assessment of national accounts indicators, in particular GDP and gross national income (GNI), but do not require assessment of the officially undeclared economy.

In order to ensure the completeness and comparability of GDP measurement within the European Statistical System, it is recommended to distinguish or estimate the following phenomena which are usually excluded from statistical sources:

– unregistered activities – producers or service providers seek to avoid tax obligations by not registering their business. This category usually includes small market producers or service providers;

– illegal activities – in line with the EC recommendations, the assessments include prostitution, smuggling of tobacco products, production and smuggling of alcoholic beverages, and production and smuggling of narcotic drugs;

– economic entities carrying out negligent or fraudulent accounting practices in order to reduce their tax liability;

– economic entities that do not need to be registered – households that carry out production for their final consumption;

– registered but not surveyed sole proprietorships – business entities may be excluded from the statistics for a variety of reasons (e.g. errors in registers);

– statistical reasons – non-final, not directly collected, not properly compiled data or incorrectly treated, processed and calculated data.

 

Share of the non-observed economy in GDP


Share of the non-observed economy in GDP by kind of economic activity


Kind of economic activity

   A

Agriculture, forestry and fishing

   B_TO_E

Industry

   C

Manufacturing

   F

Construction

   G_H_I

Wholesale and retail trade, transport, accommodation and food service activities

   J

Information and communication

   K

Financial and insurance activities

   L

Real estate activities

   M_N

Professional, scientific and technical activities; administrative and support service activities

   O_P_Q

Public administration, defence, education, human health and social work activities

   R_TO_U

Arts, entertainment and recreation, repair of household goods and other services