SCOTLAND has dodged a recession after its economy returned to growth in the last quarter, according to official data.
Scottish GDP recovered from a 0.2 per cent fall in the second quarter of 2019 to grow by 0.3% between July and September.
However over the year to the end of September, Scottish growth was a feeble 0.7%, while the UK’s was little better at 1%.
SNP Finance Secretary Derek Mackay blamed Brexit for dampening growth and investment.
Two consecutive quarters of 'negative growth' is the technical definition of a recession.
Much of the GDP increase was due to higher electricity output, which increasingly depends on wind speed.
It was up nearly 6% after two flat quarters and a 5% dip in the final quarter of 2018.
Finance and business services, which together account for 29% of the Scottish economy, also improved, whole the dominant service sector grew 0.2%.
The slight improvement in the growth figures follows a Brexit-related contraction of both the Scottish and UK economy between March and June.
In the quarter ahead of the date, many firms stockpiled goods in case of no-deal on March 29, with the increased economic activity lifting GDP.
After the deadline was extended, that process went into reverse as firms ran down their stocks and economic activity sagged.
Commenting on the latest figures, Mr Mackay said: “While it is good news the economy has grown in the last quarter, it is unsurprising the overall pace of growth has slowed as a result of the continued uncertainty around Brexit.
“Scotland has a strong economic foundation with a lower unemployment rate than the UK and we will continue to do all we can to stimulate growth, jobs and investment and help build economic resilience.
“However, Brexit remains the biggest threat to our economy. Just this week the Prime Minister has put the risk of a ‘no deal’ Brexit back on the table by ruling out any extension to the transition period. This would be catastrophic for Scotland’s economy.
“Scotland did not vote for Brexit and the people of Scotland have the right to determine their own future free from Brexit as an independent member of the European Union.
“We are focused on delivering a stronger economy and will be renewing our Economic Action Plan in the new year.”
Scottish Secretary Alister Jack said the Scottish growth was encouraging” but he was “concerned it continues to lag behind UK-wide figures over the last year”.
He said: “The UK Government is working hard to ensure that Scotland and every part of the UK grows and prospers. Getting Brexit done by agreeing the Prime Minister’s deal by 31 January, putting this uncertainty behind us, will be good for Scotland’s businesses, farmers and fishermen.
“I urge the Scottish Government to use the considerable powers at its disposal and work with us to improve the Scottish economy rather than holding it back with threats of a second independence referendum.”
Labour MSP Rhoda Grant also said the figures were a mixed bag.
The said: “Questions need to be asked as to why Scotland’s economy continues to lag behind the UK. What actions are the SNP taking to improve their poor excuse for an economic strategy?
“The time has come for the SNP to put constitutional sabre-rattling aside and focus on how they can help ensure Scotland has a well performing and healthy economy.”
CBI Scotland director Tracy Black said: "While it's good to see that Scottish GDP growth recovered following a contraction in the second quarter, underlying momentum remains weak.
"Going forward, the Scottish and UK governments need to work together, using every lever at their disposal, to stimulate growth and generate prosperity that benefits everyone in society."
Andrew McRae, of the Federation of Small Business in Scotland, added: “It’d be easy to dismiss these uninspiring growth figures, but they show that many people and firms have been getting on with business despite shaky confidence, rising overheads and political upheaval.
“If in 2020 we want smaller firms to drive stronger local growth, MPs and MSPs must find time to think about their needs. Across the UK, we must see a new drive to end the late payment crisis. And at Holyrood, we must see MSPs dismiss a half-baked effort to hand councils sweeping new tax powers.”
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