The black economy accounted for 28% of Taiwan’s GDP in 2012. That’s according to a survey released by National Chen Kung University on Monday.
The research team, led by former Finance Minister Ho Chih-chin, looked into business dealings involving unreported private cash transactions. Ho said that Taiwan’s black economy has been booming since the Global Financial Crisis of 2008.
“In advanced countries and mature economies, [the black economy] usually accounts for about 8-10% of the country’s GDP," said Ho. "We estimate it at 25% for Taiwan. Of course there are countries that have an even higher percentage than us, such as the Philippines, Indonesia and Kenya. The black economy also accounts for up to 30-40% of the GDP of countries in Eastern Europe.”
Ho said that promoting electronic payment is one way of managing the black economy. Also, according to Visa Taiwan, only 25.8% of personal consumption expenditures in Taiwan are made electronically, which is far below other Asian markets, such as Hong Kong, China, South Korea and Singapore. Reliance on cash-based payments can cost a nation 5-7% of its GDP.