Black Markets

Underground Economy Equivalent to 23 Percent of South Korea's GDP

Lots of self-employed people and a rising tax burden

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The size of South Korea's so-called underground economy was equivalent to some 23 percent of its economic output in 2012, hovering above levels of advanced economies, a report showed Sunday.

South Korea's underground economy is estimated to have reached around 290 trillion won (US267.8 billion) last year, equivalent to around 23 percent of the country's nominal gross domestic product (GDP), according to a report by the Hyundai Research Institute.

The underground economy refers to economic activities such as gambling and prostitution, which are not calculated in a country's official GDP data and leaves the government unable to impose taxes, state news agency Yonhap reported Sunday.

South Korea's 2012 figure was above the average of 13 percent for the members of the Organization for Economic Cooperation and Development (OECD) in 2007, Kim Min-jung, an economist at the institute, said in the report.

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