{"id":12055,"date":"2025-10-31T15:21:28","date_gmt":"2025-10-31T10:21:28","guid":{"rendered":"https:\/\/frank.uz\/bez-kategorii\/the-unobserved-economy-of-uzbekistan-grew-to-33-3-of-gdp\/"},"modified":"2025-10-31T15:21:28","modified_gmt":"2025-10-31T10:21:28","slug":"the-unobserved-economy-of-uzbekistan-grew-to-33-3-of-gdp","status":"publish","type":"post","link":"https:\/\/frank.uz\/en\/news-en\/the-unobserved-economy-of-uzbekistan-grew-to-33-3-of-gdp\/","title":{"rendered":"The unobserved economy of Uzbekistan grew to 33.3% of GDP"},"content":{"rendered":"<p><strong>Why is this important<\/strong><\/p>\n<p>One-third of GDP ($36 billion) operates outside of full state control \u2014 these are lost taxes, social contributions, and statistical distortions. The growth of the informal sector to 25.6% of GDP indicates the expansion of self-employment (taxi drivers, freelancers, small businesses). A decrease in the shadow sector (7.7%) is a positive trend in business legalization. Agriculture (69.4% of the uncontrolled economy) is a structural problem of the industry.   <\/p>\n<p><strong>What happened<\/strong><\/p>\n<ul>\n<li>GDP for 9 months \u2014 1.3 sq. sum ($108.73 billion), growth of 7.6%;<\/li>\n<li>Unobserved economy \u2014 433.67 trillion soums ($36.17 billion), 33.3% of GDP;<\/li>\n<li>Informal sector \u2014 333.82 trillion (GDP 25.6%), growth in share;<\/li>\n<li>Shadow sector \u2014 99.85 trillion (7.7% of GDP), decrease in share;<\/li>\n<li>The leader in the unobserved economy is agriculture (69.4%).<\/li>\n<\/ul>\n<p><strong>Structure of an unobservable economy<\/strong><\/p>\n<p><strong>Unobserved economy = informal sector + shadow sector.<\/strong><\/p>\n<p><strong>Informal sector<\/strong> (25.6% of GDP): activities of households and individuals not registered as legal entities: self-employed (taxi drivers, freelancers), small-scale trade in markets, home-based production (crafts, handicrafts).<\/p>\n<p><strong>Shadow sector (7.7% of GDP):<\/strong> hidden activities of registered enterprises: understatement of revenue, gray salaries, tax evasion.<\/p>\n<p><strong>Dynamics<\/strong><\/p>\n<ul>\n<li><strong>In the first half of the year:<\/strong> unobserved economy \u2014 32.9% of GDP;<\/li>\n<li><strong>9 months: <\/strong>33.3% of GDP (+0.4 p.p.).<\/li>\n<\/ul>\n<p><strong>Informal sector:<\/strong> the share has increased (accurate data for the first half of the year are not provided, but growth has been recorded).<\/p>\n<p><strong>Shadow sector:<\/strong> the share decreased compared to the first half of the year \u2014 a positive trend in legalization.<\/p>\n<p><strong>Analysis<\/strong><\/p>\n<p><strong>Growth to 33.3% of GDP. <\/strong>One-third of the economy operates outside the full control of the state. This means: <\/p>\n<ul>\n<li>Lost taxes: the state does not receive tens of billions of soums in revenue;<\/li>\n<li>Lack of social protection: informal sector employees do not pay to the Pension Fund, do not have medical insurance;<\/li>\n<li>False statistics: real GDP and employment are higher than official figures.<\/li>\n<\/ul>\n<p><strong>Informal sector (25.6%): <\/strong>The growth of the share indicates the expansion of self-employment and small business. Reasons: <\/p>\n<ul>\n<li>Simplicity of working without registration (Yandex taxi drivers, freelancers);<\/li>\n<li>High taxes and complex reporting for small businesses;<\/li>\n<li>Lack of formal jobs.<\/li>\n<\/ul>\n<p><strong>Shadow sector (7.7%):<\/strong> a decrease in share is a positive trend. Reasons: <\/p>\n<ul>\n<li>Strengthening tax control (online cash registers, electronic invoices);<\/li>\n<li>Simplification of tax reporting for businesses;<\/li>\n<li>Increased trust in the state and legalization of business.<\/li>\n<\/ul>\n<p><strong>Agriculture (69.4%):<\/strong> Almost 70% of the sector is an uncontrolled economy. This is a structural issue: <\/p>\n<ul>\n<li>Millions of small farmers work without registration;<\/li>\n<li>Households grow products for themselves and sell them in markets;<\/li>\n<li>Lack of formal contracts, taxes, and social contributions.<\/li>\n<\/ul>\n<p><strong>Services (36.2%): <\/strong>a high share of the unobserved economy is associated with small private services: taxi, repair, tutoring, beauty, freelancing.<\/p>\n<p><strong>Construction (35%): <\/strong>Construction boom (+33% sector growth) attracts informal workers: manual laborers, unregistered brigades, gray salaries.<\/p>\n<p><strong>Industry (10.2%):<\/strong> low share of uncontrolled economy \u2014 industry is more formalized, as large enterprises operate with strict control.<\/p>\n<p><strong>Context<\/strong><\/p>\n<p><strong>$36 billion of uncontrolled economy<\/strong> is a huge amount comparable to the country&#8217;s annual budget ($40+ billion). These are lost taxes: with an average tax burden of 15-20%, the state does not receive $5-7 billion annually. <\/p>\n<p><strong>Comparison with other countries: <\/strong>developed countries have an unobserved economy of 10-20% of GDP, developing countries \u2014 30-50%. Uzbekistan (33.3%) is in the middle zone, but the goal is to reduce it to 20-25%. <\/p>\n<p><strong>Control measures:<\/strong><\/p>\n<ul>\n<li>Simplification of business registration and tax reporting;<\/li>\n<li>Online cash registers and electronic invoices for revenue control;<\/li>\n<li>Tax benefits for small businesses and self-employed people;<\/li>\n<li>Increasing trust in the state through transparency and combating corruption.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The share of the unobserved economy reached 433.67 trillion soums. The share of the shadow sector is decreasing, the informal sector is increasing. <\/p>\n","protected":false},"author":4,"featured_media":12024,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"_sharing_image":{"poster":"https:\/\/frank.uz\/wp-content\/uploads\/2025\/10\/6904ff41970c2.jpg","width":1200,"height":630,"template":"2bf59057","mode":"auto"},"_sharing_image_fieldset":{"Dv78f24rp1hU":12024,"YlB8HH34jIzY":"The unobserved economy of Uzbekistan grew to 33.3% of GDP"},"pin_until":"","footnotes":""},"categories":[2061],"tags":[2118,2291,2185,2153],"class_list":["post-12055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en","tag-economics","tag-gdp","tag-shadow-economy","tag-statistics"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.0 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The unobserved economy of Uzbekistan grew to 33.3% of GDP &#8212; Frank.uz<\/title>\n<meta name=\"description\" content=\"The share of the unobserved economy reached 433.67 trillion soums. 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