Drugs money to form part of GDP

Payments to prostitutes and the money made from drug deals are to be included in the official record of the wealth generated by the country each year.

Drugs money to form part of GDP

The move follows on from Britain and Italy adding illegal activity to their national figures for economic activity.

The CSO confirmed that the gross domestic product figures it will release at the end of June will be higher as a result of the inclusion of what the EU describes as “production forbidden by law, eg, prostitution and production of drugs”.

The CSO said it had been in consultation with An Garda Síochána to estimate how best to quantify the levels of activity in these areas.

It is understood that while estimates do exist on how much money is generated by the peddling of illegal substances, figures on how much prostitution generates are more elusive.

The CSO has been consulting with the Office of National Statistics in Britain and Eurostat on best international practice on modelling illegal activity in the economy.

Davy chief economist Conall MacCoille said while the inclusion of the statistics might help the Government reach its deficit target of 4.8%, the activity is contributing nothing to the exchequer.

“Of course we are delighted to see the CSO capture as much economic activity in the GDP figures as possible, but the fact is that this activity is not taxed. If might help push up the GDP figure, but it will not contribute anything to the exchequer,” he said.

UK figures show that drug-dealers, brothel keepers, prostitutes, and pimps are set to give the country’s GDP coffers a £10bn (€12.3bn) boost.

Last week, Italy’s statistical office said it would start to include, among other activities, the sale of cocaine and prostitution in its figures.

The move to include illegal trade follows new Eurostat guidelines for countries to include all economic transactions in the statistics, so that those with differing legislation around drugs and prostitution can compare their total economic activity.

Eurostat said the sale of stolen goods and drugs, but not the theft of money, can be included. “Illegal economic actions are transactions only when all units involved enter the actions voluntarily. Thus, purchases, sales, or barters of illegal drugs or stolen property are transactions, while theft is not,” the legislation states.

Ruhama works with prostitutes and trafficking victims, and said the inclusion of statistics on the amount of money generated by prostitution would serve to highlight the scale of the sex trade in Ireland.

“I don’t think people realise the scale and how organised prostitution is in Ireland. If it can be used to highlight that, then we can measure it and hopefully see a change in the legislation,” a spokeswoman for Ruhama said.

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