"The sum of Germany's shadow economy which includes income from undeclared work and illegal activities such as gambling and some forms of sex work reached 510 billion ($606 billion) in 2025. That was 30 billion more than in 2024. The estimated figures came from a study carried out by financial scientist Friedrich Schneider from the University of Linz and the Institute for Applied Economic Research in Tubingen. The study predicted the shadow economy would grow by 5.5% to 538 billion in 2026."
"The boom comes amid low growth in the regular economy and rising unemployment. Both of these factors were considered drivers of the growing underground economy. The study also put the blame on the increase in the minimum wage at the beginning of 2025 to 12.82 (rising to 13.90 on January 1, 2026), as well as the increase in the earnings cap for so-called mini-jobs. Schneider called for a decrease in associated costs for employers to tackle undeclared work what Germans call Schwarzarbeit, or black work."
Germany's shadow economy, including income from undeclared work and illegal activities such as gambling and some forms of sex work, reached €510 billion ($606 billion) in 2025, €30 billion higher than 2024. Projections show growth to €538 billion in 2026, a 5.5% increase. Low regular economic growth and rising unemployment contributed to the expansion. Increases in the minimum wage and the earnings cap for mini-jobs were linked to stronger incentives for undeclared work. Recommendations included reducing employer-associated costs to curb undeclared activity. A reduced VAT rate in hospitality lowered incentives to seek shadow employment. The shadow economy equaled 11.5% of GDP in 2025.
Read at www.dw.com
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