Sunday, May 25, 2014

Italy to boost its economy by including illegal drug sales and prostitution in its GDP

Italy's statistics agency have said estimated revenues from drug trafficking and the sex trade will be used to calculate gross domestic product (GDP) starting next year in a move expected to boost its economic results.

The Istat agency said the calculation would also include revenues from contraband tobacco and alcohol, adding that the procedure would be "very difficult for the obvious reason that these illegal activities are not reported".

"The concept of what is illegal activity is also open to different interpretations," Istat said in a statement explaining that the new method of calculation in accordance with new European Union rules. The Bank of Italy in 2012 estimated the value of the criminal economy at 10.9 percent of GDP.

Theoretically, that could mean Italy's GDP result coming in far higher than the government's 1.3 percent growth estimate. The "grey economy" of businesses that do not pay taxes is already calculated in Italy's GDP and was estimated to be worth between 16.3 percent and 17.5 percent of the economy in 2008 - the last year for which the calculation was made.

1 comment:

Barbwire said...

Wow! The US's GDP would be amazing if we included illegal drugs and guns sales.