---
title: "Shadow over the economy: how the war expanded the 'grey' sector in Ukraine to 45% of GDP"
description: "Ukraine's shadow economy has reached 45% of GDP against the backdrop of the war. 'Grey' schemes are squeezing out honest business, and the budget is losing billions. EBA calls for digitization of control, but without pressure on legal entities. 📉🇺🇦"
date: 2026-06-09T07:56:00.000Z
lang: en
url: https://xab.info/en/posts/shadow-over-the-economy-how-the-war-expanded-the-grey-sector-in-ukraine-to-45-of-gdp
tags: []
publisher: "XAB.info"
---

# Shadow over the economy: how the war expanded the 'grey' sector in Ukraine to 45% of GDP

![Expert at Global Outlook event discusses Ukraine's shadow economy growth to 45% of GDP due to war](https://xab.info/media/2026/06/09/ten-na-ekonomike-kak-voyna-rasshirila-sery-sektor-v-ukraine-do-45-vvp/ten-na-ekonomike-kak-voyna-rasshirila-sery-sektor-v-ukraine-do-45-vvp-1.webp)

Amidst the full-scale war, Ukraine's economy has faced a massive problem that threatens not only budget revenues but also the very existence of legal business. According to the European Business Association (EBA), today the shadow sector accounts for 40% to 45% of the country's gross domestic product. Experts warn: instead of disappearing due to the crisis, the 'grey' economy has strengthened its positions.

### Blurred boundaries of control

In an interview with RBC-Ukraine, EBA Executive Director Anna Derevyanko noted that the weakening of state control against the backdrop of hostilities has created a favorable environment for illegal schemes. If previously shadow operations were concentrated in classic areas — retail, tobacco and fuel trade — now 'grey' methods are penetrating new industries.

The situation is exacerbated by the fact that unscrupulous players are using the lack of strict oversight for dumping. Their goods and services are offered at lower prices, which allows them to squeeze honest entrepreneurs out of the market who bear the tax burden and comply with the law.

### Blow to honest business

"Business that works honestly suffers significant losses due to unfair competition," Derevyanko emphasizes. The shadow sector not only deprives the budget of taxes but also destroys normal market conditions, creating a distortion in competition. Legal companies are forced to either go into the shadows to survive or lose market share.

EBA estimates correlate with data from the International Monetary Fund (IMF) and Ukrainian analytical centers. According to their methodologies, the level of the shadow economy in Ukraine traditionally fluctuates in the range of 30% to 50% of GDP. For comparison: in the period from 2010 to 2021, this figure was 28–36%, meaning a third of the country's economy was already outside the official sector at that time.

### Solutions: digitization and fairness

The European Business Association calls on the authorities to intensify the fight against the shadow sector, but with an important caveat: measures must not exert additional pressure on legal business. Experts name the following as key areas of detaxation:

    - Digitization of control and market monitoring processes;

    - Fair application of inspections without a selective approach;

    - Reducing the tax burden on honest entrepreneurs to make legal work profitable.

Without a comprehensive approach that takes into account the interests of honest business, it will be impossible to bring a significant part of the economy out of the shadows. In wartime, when state resources are limited, victory over the shadow sector becomes not just an economic task, but a matter of national security.