SCOTLAND's economy will receive a boost this year from the fall in crude prices this year although the key oil and gas industry faces huge problems, economists have predicted.
Experts at the University of Strathclyde's Fraser of Allander Institute reckon the resulting drop in fuel prices will encourage an increase in spending by consumers and businesses. They believe this will outweigh the effects of the damage that will be caused to the oil and gas industry.
Brian Ashcroft, Emeritus Professor of Economics, University of Strathclyde, said: "The falling oil price and recovering investment could provide a welcome boost to the recovery just as there are signs of some slowing in the rate of growth in most major economies except the US."
In its latest Economic Commentary supported by PwC, the institute has increased the forecast for this year's growth rate in Scotland to 2.6 per cent from 2.2 per cent in November.
However, it notes that the recovery in Scotland could be weakened by factors such as problems in the export markets of the eurozone and cuts in government spending in the UK.
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