"The sum of Germany's shadow economy which includes income from undeclared work and illegal activities such as gambling and some forms of sex work reached 510 billion ($606 billion) in 2025. That was 30 billion more than in 2024. The estimated figures came from a study carried out by financial scientist Friedrich Schneider from the University of Linz and the Institute for Applied Economic Research in Tubingen. The study predicted the shadow economy would grow by 5.5% to 538 billion in 2026."
"The boom comes amid low growth in the regular economy and rising unemployment. Both of these factors were considered drivers of the growing underground economy. The study also put the blame on the increase in the minimum wage at the beginning of 2025 to 12.82 (rising to 13.90 on January 1, 2026), as well as the increase in the earnings cap for so-called mini-jobs."
Germany's shadow economy totaled 510 billion euros ($606 billion) in 2025, up 30 billion from 2024 and projected to reach 538 billion euros in 2026, a 5.5% increase. Low growth in the regular economy and rising unemployment were identified as expansion drivers. The minimum wage rose to 12.82 euros in early 2025 (to 13.90 euros on January 1, 2026) and the earnings cap for mini-jobs increased, both linked to higher undeclared activity. Recommendations included lowering employer-associated costs to curb undeclared work. A VAT cut in hospitality reportedly reduced incentives for shadow work. The shadow economy equaled 11.5% of GDP in 2025 and grew 2.4 percentage points since 2021.
Read at www.dw.com
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