Shadow economy in Italy: reached 197.6 billion euros in 2023

In Italy the underground economy has reached a value of 197.6 billion euros in 2023, equal to 9.2% of GDP. Compared to the 175.4 billion recorded five years earlier, this is an increase of 22.2 billion, equal to a nominal growth of 12.6%.

According to the Censis Confcooperative Focus "The underground economy. The cost of irregularity for the Italian economy" by equally distributing these 197.6 billion euros among all Italian citizens - from newborns to the elderly - the State could provide an individual allowance of as much as 3,350 euros. Alternatively, this immense invisible reserve would be enough to cover the entire national public health expenditure for more than a year, a vital service that today requires around 142 billion euros per year.

Three phenomena affect the Italian underground economy. The bulk, equal to 108.2 billion euros, comes from under-declaration: businesses, professionals and self-employed workers who declare less to the tax authorities than they actually earn, evading taxes on production, income and VAT; between 2019 and 2023 this component grew by 21.6%. Illegal work, i.e. unregistered or only partially declared employment relationships, follows with 77.2 billion euros, increased by 4%. Finally, 12.2 billion euros derive from other components: illegal rent and undeclared tips in restaurants, hotels and personal services, essentially stable over the period.

Therefore the growth of the Italian underground economy is increasingly driven by the under-declaration of income, rather than by the traditional activity of illegal work alone.

The Istat estimates, obtained through the integration of administrative sources and the labor force survey, quantify in 2024, the last year available, 2 million and 725 thousand irregular workers present in the Italian economic system, an increase of 117 thousand units compared to the previous estimate, although remaining an overall decrease of 2.1% in six years from 2019-2024 (against a +5.4% of regular employment, an increase of 1,219 thousand units).