EU Countries To Include Drugs, Sex & Other Illegal Activities In GDP

Red Light District, Amsterdam (2168145535)Well that’s one way to boost your country’s reported economic output. One wonders whether or not each European Union nation will break down the vice trade by component so that we can see growth trends in, say, prostitution. From Bloomberg News:

Europe has a new source of economic growth. In the next few months all European Union countries that do not already include drugs, prostitution, and other illegal and gray-market businesses in their gross domestic product calculations will have to do so.

The 2010 version of the European System of Accounts becomes obligatory for GDP reporting by EU member states in September. It states unequivocally that “illegal economic actions shall be considered as transactions when all units involved enter the actions by mutual agreement. Thus, purchases, sales or barters of illegal drugs or stolen property are transactions, while theft is not.”

The ostensible goal is to make countries’ economic data comparable. Relatively permissive EU members such as Germany, Hungary, Austria and Greece, where prostitution is legal, already include the revenue it produces in their national accounts. Other countries with more prudish laws have been denied a statistical bonus. The same goes for drugs: Some of them are decriminalized in the Netherlands — and have long been included in the GDP calculation — while other countries have shied away from doing this, to their own statistical detriment.

Italy already includes much of its shadow economy in its GDP figures, but will now have to go further. Adding drugs, prostitution, and black market alcohol and cigarettes could increase Italy’s GDP by as much as 2 percent, according to Eurostat. In this way, Italy’s hookers and drug addicts would help Italian Prime Minister Matteo Renzi bring Italy’s budget deficit below the euro area’s statutory 3 percent of GDP. They would also help him to meet requirements to show declines in Italy’s debt to GDP ratio, which continued its steep rise to 132.6 percent as of December.

The U.K., which also already includes part of its gray economy, and would only add $16.7 billion, or slightly more than 0.7 percent, to its 2009 GDP under the new rules. The British Office for National Statistics hasn’t done the calculations for subsequent years yet.

GDP measurements have long been a feast of creative accounting. Italy’s 1987 sorpasso, or rush to overtake the U.K. as the world’s fifth largest economy, is an often cited example: It was achieved when Italy first started accounting for its untaxed shadow economy, adding about 18 percent to GDP…

[continues at Bloomberg News]

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  • erte4wt4etrg

    i bet prostitution is skyrocketing! haha

  • Anarchy Pony

    That’s one way to pretend your economy still functions…

    • BuzzCoastin

      real growth in numbers to be had in the shadow economy
      especially if they use cop generatated price estimates

      • JohannaHolkhamred321

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        • aaron

          How is this bitch able to post spam links no problem but when I try to post legit links it says “waiting for moderator approval.”

          • Echar Lailoken

            They augmented the links so that they are not clickable. Bypassing the spam block.

          • Matt Staggs

            No clue, in this instance. I’ve been offline for some family stuff. I’ll try to keep an eye out.

          • aaron

            No worries man I think Echar is probably correct

      • aaron

        “especially if they use cop generatated price estimates”

        Lol those estimates always crack me up.

        “Police yesterday busted a marijuana smuggling ring and confiscated 10 pounds of marijuana with an estimated street value of 5 million dollars.”

  • InfvoCuernos

    Oh sure, that will work short term, until the US starts claiming its illicit income, then it will be “USA NUMBER ONE! USA NUMBER ONE!” Wait till they get a load of how much we spend in drugs alone.

    • kowalityjesus

      can you imagine how severe inflation would be if a significant portion of our population stopped using drugs?

      • InfvoCuernos

        Ya, I could see that happening if they started enforcing some kind of drug testing for your healthcare type deal. Well maybe not drastically,

        a lot of people that are addicts would not care.

  • Rhoid Rager

    Does this mean drugs, paid-for sex and other ‘illegal’ shit is now legit?

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