The Association of Industrial Capital in Bulgaria reported a slight growth of the gray economy in Bulgaria

The Association of Industrial Capital in Bulgaria (BICA) reported a slight growth of the gray economy in 2020 compared to a year earlier. The Composite Index "Economy of Light", through which the Association of Employers measures the light part of the Bulgarian economy, is 77.49 points, compared to 78.54 in 2019.

BICA reports that in 2020 the main reasons that led to the minimal growth of the gray economy are due to the Covid crisis. Among the main reasons for the growth of the gray economy are practices generated by the labor market. For the Association, the measures taken by the government to support employment have clarified some of the gray practices in some sectors, while in others due to lack of support they have done the opposite. Among the negative factors, BICA notes another administrative increase in the minimum wage, which has led to the "emergence" of new gray practices, poorly constructed pension insurance, which does not stimulate in any way the contribution of insurance on real incomes, including a minimum pension close to the median and a maximum pension lower than the one corresponding to the maximum insurance income.

For the first time, BICA monitors and measures a second index - "Employment in the light". It has the same character and components as the Light Economy Composite Index. Through it, the focus of research is on the labor market, where over the years some of the most significant problems have emerged, with a lasting effect on the national economy. For 2020, its value is 78.31 points. To make a comparison, the sub-index was calculated for 2019, when it was 78.87 points.

"Efforts must be made to restore the declining trend in the share of the informal economy. This can only be done through the continued implementation of measures to promote voluntary implementation, reduce administrative burdens and strengthen the tax / insurance-public service link on the one hand, and to sanction violations on the other, through which Bulgaria can reach the average. European Union levels ", said the Chairman of the Board of BICA Vasil Velev.

For more than ten years, BICA has been calculating the Composite Index "Economy of Light", which aims to identify the various manifestations of the informal economy and to stimulate policies to limit it. From the beginning of the calculations until now, the Index is growing, and the only year before 2020, in which a decline of 1.2 points was reported, was 2014.

At the beginning of 2022, BICA launched a new study to calculate the two indices, expecting stabilization and their gradual increase in the coming years based on the expected growth of the Bulgarian economy.

Both indices are calculated under the project "Improving access to employment and job quality by limiting and preventing undeclared employment" co-financed by the ESF through OPHRD 2014-2020.