The shadow or informal economy represents, on average, 11.8% of the global GDP. In low-income countries, such as Mozambique, this share is much more significant, averaging 42.4% of total national wealth. In contrast, in higher-income economies, the weight of the informal economy drops to just 5.9%.
Countries like Sierra Leone, Niger, and Nepal have a shadow economy that exceeds 50% of their GDP. In Mozambique, in 2023, official figures indicate that the informal economy represented 39.1%, amounting to a value of 8.4 billion dollars that circulate “off the books” of the official national accounts — though it’s likely that these figures are underestimated due to weaknesses in the statistical data collection system.
At the other end of the scale, in the United States, the “shadow economy” is estimated to account for around 5% of GDP, representing roughly 1.4 trillion dollars. The country with the lowest share of informal economic activity is the United Arab Emirates.
What is the informal economy?
It is estimated that the global shadow economy moves trillions of dollars annually through a wide range of undeclared transactions, ranging from legitimate day-to-day activities to serious criminal operations. This includes diverse transactions such as purchases from street vendors to arms or drug trafficking. The common denominator is the circulation of cash “outside” official registration, tax, or fiscal systems.
Despite the challenge of measuring this reality accurately, the Global Shadow Economy Report 2025, produced by consulting firm Ernst & Young, points to a declining trend: from 17.7% of global GDP in 2000 to 11.8% in 2023.
