13-2014 The impact of illegal activities on Luxembourg’s economy

Prostitution and trafficking of drugs are the two main components of illegal activities in Luxembourg. These activities are part of national wealth, as measured by gross national income (GNI), by the revenues they provide to some residents. Eurostat, in close cooperation with European Union member states, has defined a methodological framework for integrating such illegal activities into the national accounts. Comparability between member states has been a prime objective. The estimates for illegal activities will be included in member states accounts according to the revised European System of Accounts (ESA 2010) by September 2014. After a first estimate of illegal activities in 2006, STATEC undertook an impact assessment on both gross domestic product (GDP) and gross national income (GNI) for the year 2012. The impact is about 0.3% of both GDP and GNI. Although relatively low, these activities are nevertheless significant, especially when directly compared to certain industries of the legal economy.