The money from the illegal economy that came back into the legal economy following the introduction of the capital controls and the increase in electronic transactions are the main reasons behind the containment of last year’s economic recession to just 0.3 percent of gross domestic product, according to a National Bank report published on Thursday.
The bank’s financial analysis department highlighted that the flourishing of online payments made a big dent in the illegal economy and reduced the recession, and, if extended, could completely wipe out the recessionary impact of the implementation of fresh austerity policy measures in 2016.
The bank’s analysis shows that the boost in economic activity through electronic transactions (that rose from 4.7 percent of all transactions in 2014 to an estimated 6.8 percent last year) amounted to 1.4 percent of GDP in the second half of 2015, thereby adding 0.8 percent to the annual GDP.
Without that contribution and the beneficial drop in global oil rates, the annual GDP contraction would have come close to 2.5 percent – i.e. near to the original estimate for a 2.3 percent yearly contraction. Estimates say that the impact on GDP of a 10 percent annual rise in online transactions would amount to a 0.2 percent increase.