Ranked: The World’s Biggest Shadow Economies

Dorothy Neufeld
2025-05-31 11:28:00
www.visualcapitalist.com

Ranked: The World’s Biggest Shadow Economies

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

The world’s $12.5 trillion informal economy covers nearly every corner of the world, seeing the highest concentration in emerging economies.

Yet in absolute terms, China, the U.S. and India are home to the largest black markets—covering everything from street vendors to illegal activities that evade governmental oversight. Overall, this generates lower tax revenue and poorer working conditions given the absence of worker protections, leaving millions exposed to poor working conditions.

This graphic shows the largest shadow economies in the world, based on data from the EY Global Shadow Economy Report 2025.

Measuring the Informal Economy

While measuring the size of show economy activity is challenging, Ernst & Young used more than 70 variables to analyze unobserved economic activities in a country.

Primarily, a currency demand approach was used to examine cash use patterns across 131 jurisdictions covering 97.2% of world GDP. This is largely due to the informal economy driving significant demand for cash, especially high-denomination bills.

China’s Informal Economy is the World’s Largest

Since 2004, workers employed in China’s informal economy have nearly doubled, reaching approximately 200 million.

Driving this trend are jobs are found in the labor-intensive services sector, such as drivers, nannies, and roadside repairmen. As a result, China’s income tax revenue accounts for about 6% of GDP—far lower than the 24% OECD average.

Rank	Country	Shadow Economy Value	Shadow Economy % of GDP in 2023
1	China	$3.6T	20.3
2	United States	$1.4T	5.0
3	India	$931B	26.1
4	Brazil	$448B	20.6
5	Indonesia	$326B	23.8
6	Mexico	$320B	17.9
7	Germany	$308B	6.8
8	Japan	$282B	6.7
9	Russia	$265B	13.1
10	France	$205B	6.7
11	Türkiye	$180B	16.1
12	Italy	$180B	7.8
13	UK	$179B	5.3

Ranking in second is the U.S. shadow economy, valued at $1.4 trillion. Overall, states with lower real GDP and higher regulatory burdens tend to have more active underground economies.

Meanwhile, Brazil leads in Latin America, with a shadow economy valued at $448 billion. In Europe, Germany is home to the largest at $308 billion, equal to 6.8% of GDP.

Learn More on the Voronoi App

To learn more about this topic from a country-based perspective, check out this graphic on the size of the shadow economy by country.

Source Link

Please read the Privacy and Security Disclaimer on how Techcratic handles your support.

Disclaimer: As an Amazon Associate, Techcratic may earn from qualifying purchases.