Italy's illegal economy is the size of Portugal's GDP

Undeclared transactions, drugs and prostitution generated around 1,3 trillion reais

Italy has a shadow economy that encompasses everything from undeclared transactions to drugs and prostitution, and is roughly the size of Portugal, according to the authorities' most recent estimate.

The Italian statistics agency, Istat, announced this Wednesday that its assessment of clandestine and illegal activities in 2018, the last year for which data is available, was around 211 billion euros – around 1,3 trillion reais.

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The total fell by around 1,3% compared to the previous year, reducing the weight of the parallel economy in Italy's gross domestic product (GDP) to around 11,9%. The peak was 13% in 2014.

Prime Minister Giuseppe Conte's government is working on a new measure to try to further regularize the country's economy, discouraging the use of cash.

The plan would reimburse 10% of card transactions, returning a maximum of 300 euros per person, while allowing citizens to participate in a type of draw associated with a prize of 300 million euros.

More than 3,6 million people evade taxes, the majority concentrated in areas such as transport and food, according to authorities.