Abstract

The problem of significant shadow economy in Ukraine has been very important since Ukraine independence. But due to its peculiarities as an economic phenomenon, it is difficult to assess completely the degree of its influence on the development of the national economy. Besides, the influence of external and internal destabilization factors of economic and political environment in Ukraine (military aggression in the East, annexation of the Crimea, the pandemic of coronavirus disease 2019 (COVID-19), caused by SARS-CoV-2, high levels of corruption, etc.) distract attention from equally important problems of the development of the national economy. In the context of the impact of shadow economy on the national one, the volume of lost GDP and decrease in tax revenues are more considered more often, but the impact caused by shadow level of the national economy is reflected not only in the above-mentioned indicators of the Ukrainian economy development, but also in many others. This particularly concerns the level of inflationary processes as an essential indicator that, combining the economic and social aspects of the country's development, reflects the state of the national economy and its future development prospects. The existing relationship between inflation and the level of shadow economy is reflected in the direct correlation between these indicators and is characterized as direct. At the same time, like the strengthening of inflation processes results in the increase in the level of shadow economy, the increase in the level of shadow economy results in the inflation growth. That is, the identified connection is bilateral, but not equivalent. Available statistics data do not confirm a significant decrease in the level of shadow economy with the decrease of inflation, which is due to the need of carrying out significant and thorough work on its development, which is not limited by the level of inflation decrease. The decrease in the level of shadow economy in Ukraine by 1% will potentially reduce the inflation rate by 2%. The existence of such connection creates the possibility of regulating inflation level due to the level of the shadow economy decrease, expanding the existing tools for regulating inflationary processes, as well as the additional opportunities for further development of the Ukrainian economy.

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