THE IMPACT OF THE HIDDEN ECONOMY IN UZBEKISTAN

Аbstract: The hidden economy, often referred to as the shadow or informal sector, encompasses economic activities that are deliberately concealed from official authorities to evade taxes, regulations, or oversight. It includes unregistered businesses, undeclared income, and informal employment that operate outside the formal legal framework. In Uzbekistan, the shadow economy manifests through various channels such as unregistered enterprises, underreported sales, and illegal trade, which collectively undermine the transparency and integrity of the national economic system. The size and scope of this sector are challenging to measure precisely; however, models like the MIMIC (Multiple Indicators Multiple Causes) suggest that it constitutes a significant portion of the country's economic activity, with estimates ranging from approximately 9% to over 20% of GDP depending on the methodology and period analyzed. Understanding the nature of the hidden economy is crucial for designing effective policies aimed at economic formalization and sustainable development.

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