RIGA - The size of the shadow economy'sor gray economy'sin Latvia is currently estimated at about 25 percent of GDP, Economy Minister Aigars Stokenbergs said in a recent interview.
Stokenbergs did, however, reiterate that the state would continue fighting the shadow economy, though he harbored no illusions about making a substantial dent in the size of unreported economic activity. "I think that if we manage to decrease it to 15 percent, it would be good enough," he said.
The shadow economy's legalization, he added, was one of the reasons for the steep growth of GDP in Latvia, the highest in the EU.
According to the minister, out of last year's GDP growth of 10.2 percent, the legalization of the shadow economy contributed some 2 's 3 percentage points. In the first quarter of 2006, when growth registered a staggering 13.1 percent, the shadow economy amounted for some five percentage points.
"Proof can be found in the statistics of the State Revenue Service," said the minister.
These calculations, he added, show that Latvia's economy was developing at an appropriate pace, growing about 8 percent annually. No measures should be taken to prevent an economic overheating, the minister said.
