ALMOST 100,000 people in Scotland are expected to lose their jobs by the end of the year as the coronavirus crisis takes its toll.

Gary Gillespie, the Scottish Government’s chief economist, said unemployment may peak at around 8.2 per cent over the next three months, following the end of the furlough scheme.

This is almost double the current rate of 4.6%. Figures earlier this month showed the number of unemployed people in Scotland has already increased slightly to 128,000.

It came as the University of Strathclyde’s Fraser of Allander Institute estimated Scotland’s economy could take until 2024 to recover from the pandemic.

It said the economy is experiencing a fragile recovery and is at a “crucial crossroads”.

A report by the institute warns the country faces “taking a step backwards” because of the spike in coronavirus cases, with a recovery expected to take between one and four years, depending on what restrictions are needed in the future and the development of a vaccine.

Scenario planning by the institute found that challenges around test and trace, the looming winter months and associated illnesses and the rising coronavirus infection rate could mean the economy is in “limbo” for the next six months.

Mairi Spowage, deputy director of the institute, said: “Whilst a tentative recovery is under way, the economy is a long way off where it was before the start of the crisis.

“We have therefore reached a crucial crossroads in our recovery from the crisis.

“What happens next will depend on the evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors.

“All of these remain hugely unclear.

“What is striking about the immediate outlook is just how uncertain it is – indeed, it is hard to think of a past occasion when the range of possible outcomes has been so wide.

“What we can agree on, however, is that the task of rebuilding our economy will take years.”

In its Deloitte-sponsored economic commentary, the institute argues that the ending of the UK Government’s furlough scheme will be a pivotal moment in the recovery.

Stating that the Chancellor’s replacement job support scheme is “much less generous”, it adds: “Removing the furlough scheme too early, particularly in sectors like hospitality and tourism, has the potential to undermine the good work done to date.”

Professor Graeme Roy, the institute’s director, said: “History is likely to judge the Chancellor’s decision to pay 80% of workers’ wages during the height of the lockdown as one of the most effective policy responses to any economic crisis in history. Over nine million workers have benefited.

“The new scheme is very different, and given the relatively minor subsidy it provides for wages, it is unlikely to protect jobs, hours and incomes in those sectors who are really suffering.”

Mr Gillespie said economic output north of the Border is 10.7% lower than before coronavirus began to spread in Scotland, having recovered after falling 22.1% in the first two quarters of the year.

SNP Economy Secretary Fiona Hyslop said 61,000 jobs in Scotland would be saved if the furlough scheme was extended by eight months.