German Shadow Economy to Grow by 6.1% in 2025, Study Predicts

Experts attribute the rise in unreported work to economic contraction, higher unemployment, and increased social insurance contributions.

A study by economists Friedrich Schneider and Bernhard Boockmann forecasts Germany's shadow economy will reach €511 billion in 2025, a nominal increase of 6.1%.
The primary drivers of this growth are weak economic performance, a projected 0.4% GDP contraction, and a 2.9 million unemployment figure.
Higher social insurance contributions, including for health and pensions, are expected to add €2 billion to the shadow economy.
Measures such as a modest minimum wage increase and adjustments to income tax brackets are predicted to have minimal impact on curbing undeclared work.
A separate study estimates that between 8 and 10 million people in Germany are currently engaged in unreported labor.