Estimate of Unofficial Economy in the Republic of Croatia During 1998-1999 According to Eurostat

The paper shows the estimate results of grey economy in Croatia during 1998-1999 by activities and forms of grey economy. The fundamental methodology used in size estimate of grey economy is the Eurostat approach. This approach offers the frame for estimate of unofficial economy which is specially adjusted to countries in transition.
The estimate is based on usage of collateral data about employment based on official (administrative) sources and data from labour force inquiry, as well as other numerous additional data sources. In accordance with international recommendations, a special attention is paid to various necessary methodological adjustments of range in order to get, according to international methodology, comparable value of entire income made on the territory of the Republic of Croatia. Income achieved from illegal activities is shown as separate category.
According to estimate results the entire grey economy of the Republic of Croatia amounted to 12.248,2 million kuna in 1998. This is 11,1 percent of official gross added value calculated by basic prices, or 8,9 percent of official GDP which beside added value by basic prices includes also all taxes and subsidies on products which are not arranged by activities but are shown at the level of national economy. In 1999 grey economy amounted to 11.508,3 million kuna, what amounts to 10,12 percent of gross added value by basic prices, or 8,1 percent of official GDP. The authors define the estimate by conservative or lower limit of estimate. According to results, dominant form of grey economy in the Republic of Croatia represents income by the basis of unregistered work .
For the size of entire grey economy it is necessary to correct official gross domestic product. Numerous economic indicators necessary for conducting economic policy also change after the grey economy inclusion.