Virus may see Scottish economy shrink by a third
Fiona Hyslop: ‘we are doing everything we can’ (pic: Terry Murden)
Scotland’s economy could shrink by a third because of the coronavirus pandemic, according to a report by the Chief Economist.
Gary Gillespie’s analysis shows that GDP in Scotland could fall by around 33% during the current period of social distancing.
Economic activity is estimated to be down by 22%, affecting 109,000 jobs and a third of businesses. About a fifth of workers are on furlough while claims for universal credit have risen to 130,000 since 15 March compared to 15,500 at this time last year.
The findings in the latest State of the Economy report are similar to estimates from UK and international bodies such as the Office for Budget Responsibility (OBR) and the Organisation for Economic Co-operation and Development (OECD).
Economy Secretary Fiona Hyslop said: “Our response to COVID-19 is saving lives, but I am deeply aware that the pandemic is having an economic effect that is already being felt across Scotland.
“The Scottish Government is doing everything we can to support businesses at this very difficult time.
“We want Scotland to recover as quickly as possible from this outbreak, and that includes rebuilding our economy as quickly as is safely possible.
“None of us should be under any illusions about the scale of economic recovery and, as we have said before, no government will have all of those answers.
“That is why we have set up an independent advisory group to provide expert economic advice and this will be crucial to help us deal with the challenge of rebuilding our economy.”
The latest labour market figures show that the UK employment was at a record high in the three months to February, before the effects of the coronavirus lockdown took hold.
Official figures showed 76.6% of people aged 16 to 64 were in paid work, up from 76.4% in the previous quarter.
Unemployment was estimated at 4%, slightly higher than the previous quarter, the Office for National Statistics said.
Scotland’s employment rate estimate rose over the quarter to 75.4% and remained close to the highest on record. The unemployment rate estimate fell over the quarter to 3.7%, also close to the record low.