Scotland could lose out on almost £2 billion in business investment next year, according to the country's chief economist.

In the Scottish Government's quarterly State of the Economy Report, Gary Gillespie predicts a loss of investment in the country should uncertainty around the UK's exit from the EU persist into the early part of next year.

The report compared the level of business investment expected without the lack of clarity caused by Brexit with new forecasts of how the landscape could look if negotiations with the EU continue.

Forecasts up to April 2020 show £500 million of investment could be wiped out if uncertainty continues.

READ MORE: Scotland's economy is on the brink of a recession

Another drop of £500 million is predicted in the second quarter of 2020, with subsequent quarters experiencing falls of £450 million and £400 million respectively.

The analysis looked at the impact felt by businesses until the end of the 2020, which shows almost £2 billion less than forecast if there was no Brexit uncertainty.

Opposition parties at Westminster are trying to extend the deadline to leave the European Union until the end of January.

The report said: "The results show that the additional impact of this prolonged period of uncertainty is estimated to have reduced or deferred the level of business investment in Scotland by a further £500 million by the start of 2020-21 than previously estimated."

HeraldScotland: Letters: We must be given the full facts on how EU question affects Scotland

The report also claimed a no-deal Brexit would pose a risk of "recession with a corresponding sharp rise in unemployment".

Responding to the report, Finance Secretary Derek MacKay said: "Following the publication of GDP figures this week, this report is another warning of the worrying impact that Brexit uncertainty is already having on the Scottish economy and the risks it presents for the future.

"There is no doubt that any form of Brexit will damage our economy and a 'no deal' would be disastrous for Scotland and could push the country into recession.

"A no-deal Brexit is completely unnecessary but seems to be the outcome the UK Government is now actively pursuing."

He added: "The Scottish Government has been clear and consistent that the best option for the future well-being and prosperity of Scotland is to stay in the European Union.

READ MORE: Ian McConnell: SNP’s Mackay has every right to be aggrieved as Tory Brexit drags down nation

"We are already taking steps to protect jobs and our economy from Brexit but not every impact can be mitigated.

"We will continue to stand firm against efforts to take us out of the EU against our will."

Scottish Labour leader Richard Leonard said: "Boris Johnson's disastrous drive towards a no-deal Brexit will damage Scotland's and the whole of the UK's economy.

"It won't be Johnson or his party's hedge fund donors who will pay the price for his policies, it will be ordinary people in communities across the country.

"That's why Labour has been fighting the Tories' plans for a no-deal Brexit every step of the way and will continue until the threat is taken off the table."

Scottish Liberal Democrat leader Willie Rennie said: "The UK Government's disastrous approach to Brexit has done enormous economic damage before we have even left the EU.

"The Liberal Democrats are the rallying point for all those who recognise that what's best for Scotland's economy is for us to be at the heart of both the UK and the EU.

"We can make the chaos stop."

A Scottish Government spokeswoman said: "The latest update from Police Scotland makes clear the range of issues and challenges that the service is facing in relation to Brexit, particularly in relation to a no-deal EU exit.

"In recognition of that, we have assured the Scottish Police Authority that up to £17 million is available this year to cover EU exit-related policing costs.

"Annual funding for Police Scotland is now more than £1.2 billion and we continue to engage closely with the service and the authority to support them in keeping people safe.

"As well as pursuing the UK Government to ensure it meets the full costs of EU exit, we will continue to press them to pay back the £125 million VAT paid by Police Scotland before the Treasury reversed this unfair policy in 2018."