Around 14% of the Czech economy—equivalent to roughly 1 trillion korunas annually—operates in the informal or “grey” economy, according to a study by Kearney Czech Republic.
This hidden activity, which involves unregistered and illegal channels, accounts for about one-seventh of the country’s GDP. The study, presented this week at a seminar on digital payments and the informal economy in the Chamber of Deputies, ranks the Czech Republic 11th among the 27 EU member states in this regard.
“Compared to other countries, our results are not bad, but there is room for improvement to match Western and Northern Europe,” said Jan Šarapatka, director of Kearney’s Czech branch.
The EU average for informal economic activity is 17.9%. Austria leads with the lowest rate at 7.2%, while the worst performer is at 33.5%. For comparison, the informal economy accounts for 8.5% in the Netherlands, 10% in Germany, 14.6% in France, and 22.1% in Poland.
Šarapatka noted that until 2019, the share of the informal economy had been gradually decreasing. However, the COVID-19 pandemic and the war in Ukraine reversed this trend, pushing some individuals back into informal work.
Labor-intensive industries such as manufacturing and construction are significant contributors to the grey economy. In these sectors, workers often receive part of their wages off the books, leading to an estimated 10–36% of activities falling into the informal sector.
