Italy's National Institute of Statistics (ISTAT) published its annual report on the "non-observed economy" on October 16, 2026, covering the years 2021 to 2024. According to the official release, undeclared economic activity and illegal markets combined were worth €218.2 billion in 2024, equivalent to 9.9% of gross domestic product, down from 10.2% in 2023.
What ISTAT Measured
ISTAT splits the non-observed economy into two parts: the underground economy, made up of underreported revenue and unregistered labor, and illegal activities, which under EU statistical rules cover drug trafficking, prostitution services, and smuggling of tobacco and alcohol. The underground economy alone reached €198.4 billion in 2024, up €0.8 billion from the previous year and equal to 9.0% of GDP. Illegal activities were valued at €19.8 billion, or 0.9% of GDP.
ISTAT noted that the overall non-observed economy grew by 0.3% year-on-year, well below the growth of nominal GDP, which is why its share of the economy fell despite the absolute increase in euros.
Italy's non-observed economy, 2023 vs 2024 (ISTAT)| Indicator | 2023 | 2024 |
|---|
| Non-observed economy, total | €217.6bn (10.2% of GDP) | €218.2bn (9.9% of GDP) |
|---|
| Underground economy | €197.6bn | €198.4bn (9.0% of GDP) |
|---|
| Illegal activities | €20.0bn | €19.8bn (0.9% of GDP) |
|---|
| Irregular labor units (FTE) | 3.132 million | 3.277 million (+4.6%) |
|---|
| Irregularity rate of employment | 12.7% | 13.1% |
|---|
Irregular Labor Grew Faster Than Regular Jobs
ISTAT counted 3.277 million full-time-equivalent irregular workers in 2024, an increase of about 145,000 units, or 4.6%, from 2023. Irregular dependent employment rose 5.4% (+121,800 units) while irregular self-employment rose 2.7% (+23,400 units). Overall employment irregularity climbed to 13.1% of the workforce from 12.7% a year earlier. By comparison, regular employment grew only 1.6% over the same period, according to ISTAT and reported by Italian news agency ANSA.
The value added generated specifically by unregistered workers came to €80.3 billion, up €3.1 billion from 2023, and now accounts for 36.6% of the entire non-observed economy, up from 35.5% in 2023, according to ISTAT.
Sectors With the Highest Irregularity
ISTAT identified other personal services, including domestic work, as the sector with the largest underground share of value added at 30.7%, followed by trade, transport, accommodation and food services at 18.5%, and construction at 17.7%. On irregular employment specifically, other personal services again led at 41.4% of workers, followed by agriculture at 18.4%; trade, transport, accommodation and food services stood at 15.5%, according to ISTAT.
Political Reactions
Italian news outlet Il Fatto Quotidiano noted that Prime Minister Giorgia Meloni had said in March 2023 that the Reddito di Cittadinanza (Citizens' Income) welfare program "made undeclared work proliferate," arguing that abolishing it would reduce undeclared work. The outlet reported that the government subsequently renegotiated a commitment under Italy's EU recovery plan that had targeted a two-percentage-point reduction in irregular work, replacing it with alternative measures centered on labor inspections and employment centers; the European Commission approved the change. Il Fatto Quotidiano said the 2024 increase in irregular work does not prove the abolition caused more undeclared labor, but added that the data runs counter to the government's earlier claim.
ISTAT's report does not attribute the change in irregular labor to any specific government policy; the statistics agency's release focuses solely on measurement of the non-observed economy under national accounting standards.
Questions
- How much is Italy's undeclared and illegal economy worth?
- ISTAT reported it at €218.2 billion in 2024, equal to 9.9% of GDP, split between €198.4 billion in underground economic activity and €19.8 billion in illegal activities.
- Did Italy's black market grow or shrink in 2024?
- In absolute terms it grew by 0.3% (about €0.6 billion), but because GDP grew faster, its share of the economy fell to 9.9% from 10.2% in 2023, according to ISTAT.
- Which sectors have the most irregular work in Italy?
- ISTAT found other personal services, including domestic work (41.4% irregular), and agriculture (18.4%) had the highest irregular-employment rates, with trade, transport, accommodation and food services also among the top contributors.
- Did scrapping the Reddito di Cittadinanza reduce undeclared work, as the government claimed?
- ISTAT's 2024 data show irregular labor units rose 4.6%, faster than regular employment's 1.6% growth; Il Fatto Quotidiano reported this runs counter to the government's earlier claim that ending the benefit would shrink undeclared work, though it does not establish that the abolition caused the increase.
- What counts as "illegal activities" in ISTAT's measurement?
- Under EU statistical rules cited by ISTAT, illegal activities in national accounts cover drug trafficking, prostitution services, and smuggling of tobacco and alcohol, together valued at €19.8 billion in 2024.
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