The wizarding economy is the system of production, trade, and consumption of magical goods and services within the magical community. It functions as a largely self-contained system, operating parallel to but mostly separate from the non-magical or Muggle world, a separation enforced by the International Statute of Secrecy. The economy is characterized by its unique precious metal-based currency, a central banking institution run by Goblins, and specialized industries that cater to the needs of witches and wizards. Key commercial activity is concentrated in specific magical locations like Diagon Alley and Hogsmeade.
The financial system of the British wizarding world revolves around a single bank, Gringotts, and a non-decimal currency system.
The currency consists of three types of coins:
The exchange rates are fixed:
Each coin is imprinted with a serial number that identifies the specific Goblin responsible for minting it. Counterfeit currency, such as Leprechaun gold, exists but is magically enchanted to vanish after a short time.
Gringotts Wizarding Bank is the primary financial institution for witches and wizards in Great Britain. Managed and staffed by Goblins, it is considered one of the safest places in the magical world, second only to Hogwarts School of Witchcraft and Wizardry. Its services include:
Trade in the wizarding world is robust, with dedicated commercial districts and specialized industries.
The main commercial hub in London is Diagon Alley, accessible through The Leaky Cauldron. It contains a wide array of shops, including:
For older students and the wider wizarding community, the village of Hogsmeade offers additional shops and pubs, such as Honeydukes, Zonko's Joke Shop, and The Three Broomsticks. A darker side of commerce exists in Knockturn Alley, where vendors like Borgin and Burkes trade in Dark Arts artifacts.
Several key industries support the wizarding way of life:
The largest single known employer in the British wizarding world is the Ministry of Magic, which employs thousands of witches and wizards in various departments. Other significant employers include Hogwarts School of Witchcraft and Wizardry and St. Mungo's Hospital for Magical Maladies and Injuries. Notable professions include:
Specific wages are rarely mentioned, but Dobby the house-elf successfully negotiated a salary of one Galleon a week from Albus Dumbledore, a wage considered generous for his kind. Significant sums of money can also be won, such as the 700-Galleon Grand Prize from the Daily Prophet Galleon Draw won by the Weasley family, or the 1,000-Galleon prize for winning the Triwizard Tournament.
There is a clear and significant wealth disparity within the wizarding world. This often, but not always, aligns with blood status.
Due to the International Statute of Secrecy, the wizarding economy is highly insular. However, limited and necessary interactions with the Muggle world do occur.