Thanks to some creative accounting methods, Italy has brought itself out of recession by adding revenue to its GDP originating from illegal activities such as prostitution, narcotics and black market cigarettes. That’s right – drugs, sex and alcohol (underground sales) – are responsible for lifting Europe’s third largest economy out of a steady decline.
According to the country’s National Institute for Statistics, Italy’s economy – which has gone through two recessions since 2008 – was found to have risen from a 0.1 per cent decline for the first quarter of 2014, to a virtual flat reading.
The new accounting system - known as ESA 2010 - is designed to help with comparisons of economic data between E.U. nations, given the fact that some have now decriminalized prostitution and drug use.
The revision gives some much-needed breathing room for Italy’s embattled Prime Minister Matteo Renzi, who has been struggling to improve the economy and implement reforms while keeping the deficit below the E.U.’s three percent ceiling.
But Renzi is already finding that turning the country’s economy around won’t be as easy as just implementing some creative accounting procedures to make up for real deficits. Plus, there’s something a bit strange about governments taking credit in official statistics for wealth generated by activities they would normally throw people in jail for.
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