A state-run think tank has estimated that South Korea’s underground economy makes up eight percent of the nation’s gross domestic product(GDP). That’s far lower than the figure of 25 percent that had been previously reported.
 
According to the report released by the Korea Institute of Public Finance on Friday, South Korea’s underground economy amounted to 124-point-seven trillion won in 2015, accounting for eight percent of the nation’s GDP.
 
Underground economy refers to illegal activities not typically measured in the national wealth due to under or unreported income and tax dodging. Because of these reasons, it is regarded as difficult to measure its exact size.
 
The most widely-known estimate so far is one by an Austrian economics professor, Friedrich Schneider, who assessed that South Korea’s shadow economy accounted for 24-point-seven percent of the nation’s GDP in 2010.