Germany's underground economy has grown to 510 billion euros in 2025, with a forecast of 538 billion in 2026, due to economic difficulties and unemployment.

According to a recent study, Germany's underground economy reached its highest level in the last decade in 2025, estimated at 510 billion euros. Friedrich Schneider, a finance expert, emphasizes that this increase is due to the weak economic performance and rising unemployment, which reduce income from declared jobs and stimulate undeclared activities.

It is estimated that in 2026 the underground economy will grow by 5.5%, reaching 538 billion euros. However, the reduction of VAT in the hospitality industry could diminish the tendency to operate outside the tax system. The study shows that the underground economy includes undeclared work and income from illegal activities, and its ratio to Germany's economic output is below the average of 20 other industrialized countries, but it has increased significantly since 2021.