The Effect of Informal Economy on the Economic Performance of Serbia

All countries, regardless of the type of society and the level of socio - economic development, to a greater or lesser degree, have a problem with the informal economy. It can be said that, the informal economy represents a part of the economy that is characterized by irregular and illegal business. The burning issue of the whole society of Republic of Serbia is informal economy. The goal is not to eliminate the so-called. «black market», because it is virtually impossible, but the goal is to reducing it on european frameworks. However, the current situation most closely resembles to the struggle against the wind. The aim of this paper is to indicate on the share of informal economy in total economic activity, then on its essential forms, as well as on the necessary measures and instruments of economic policy which will be taken to reduce its participation.