Scotland’s economy is forecast to grow by 1% in 2020 – with experts saying Brexit “remains a risk” to the economy.
The Scottish Fiscal Commission has published a range of economic forecasts alongside the Scottish Government’s Budget for 2020-21.
It predicted GDP will increase by 1% this financial year, rising to 1.1% next year and 1.2% in 2022-2023.
We forecast GDP growth to increase over the forecast period. This is largely driven by our forecasts of increasing productivity growth. https://t.co/885HQBNbry #ScotBudget pic.twitter.com/xK6zPxmtn1
— Scottish Fiscal Commission (@scotfisccomm) February 6, 2020
Meanwhile, employment is forecast to remain stable at 2.65 million this year, before increasing to 2.66 million in each of the next three years.
Brexit negotiations and uncertainty over the timing and nature of the UK’s departure from the EU has “resulted in subdued growth over the last year”, the SFC report said.
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Now the UK has left the EU “the unwinding of some Brexit-related uncertainty may support some additional growth”, it added.
But the SFC said Brexit “remains a risk to continued economic growth”.
The outlook for trade has been exacerbated by the potential for global trade wars and, more recently, the potential fallout from the coronavirus
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The report said: “Concerns remain about slowing global growth, particularly in the euro area, and this is expected to affect Scotland’s trade prospects.
“The outlook for trade has been exacerbated by the potential for global trade wars and, more recently, the potential fallout from the coronavirus.
“Our estimate of productivity growth in Scotland has remained low and below our previous forecasts.
“As a result, we have revised down our forecast of trend productivity growth at the beginning of the forecast period.”
Public Finance Minister Kate Forbes said the SFC forecasts “confirm that not only has uncertainty around leaving the EU already held back growth over recent years but that EU exit will continue to be bad for our economy, holding back growth in trade and productivity”.
She added: “Despite these challenging conditions the economy continues to grow.”
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