Bank of Italy raises doubts over value of crime in economy

(ANSA) - Rome, June 23 - Estimates that as much as 10% of Italy's gross domestic product (GDP) is derived from criminal activities is "only a hypothesis," the Bank of Italy said Monday.
    Statisticians from the central banking were reacting to estimates that extrapolated the impact of crime on the national economy.
    Those estimates were made after national statistics agency Istat announced earlier this month that it would begin to estimate the value of some criminal activity, including drugs, prostitution, and smuggling, in its calculations of economic activity.
    Italy is one of several European nations that are to begin to include activities within the underground economy in its macroeconomic indicators under new accounting methods sanctioned by the European Union in line with a "best practices" directive laid out by the United Nations in 2008.
    Other nations beginning to take account of the value of crime include the United Kingdom and Ireland.
    A report in the Wall Street Journal earlier this month suggested that Italian GDP could be increased by 1-2% when the country starts including crime when measuring its economic activity. Skeptics of the changes question the accuracy of the resulting figures given that transactions made in the shadow economy are by definition hard to quantify.
    However the UN in its 2008 directive warned that national accounts "as a whole are liable to be seriously distorted" if all transactions are not tabulated.
    There is a plus side for Italy to include the calculations - a higher GDP will help it to meet its obligations to keep its deficit as a proportion of GDP within the prescribed EU limit of 3%.
    In April, statistical agency Istat said Italy's deficit-to-GDP ratio in 2013 was 2.8% by some measures.