GDP falls

Scottish economy shrinks 0.3% in second quarter

Alexander Dennis
Scotland’s output has fallen (pic: Terry Murden)

Scotland’s economy shrank by 0.3% in the three months to the end of June compared with the previous quarter when it grew by 1%.

GDP was flat for the month of June when output in the services sector, which accounts for around three quarters of the economy, is estimated to have grown by 0.3%. This was offset by a reduction of 1.8% in the production sector.

Wellbeing Economy Secretary Neil Gray blamed the cost of living, higher interest rates, Brexit and “the UK government’s handling of the economy”.

He said: “The Scottish economy is not alone in facing extremely challenging circumstances.

“The cost of living crisis and higher interest rates are impacting on the ability of households and businesses to spend, which in turn affects the wider economy.

“And Scottish businesses also continue to suffer due to the effect Brexit has had on supply chains, trade and the free movement of people, which has in turn had a significant impact on businesses in terms of staffing.

“Analysis show that independent European nations, similar in size to Scotland, are wealthier and fairer than the UK, and that is the level of ambition this government has for Scotland.

“By focusing on the principles of equality, opportunity and community, an independent Scotland can build a fair, green and growing economy.

“Ultimately, this crisis has been worsened by the UK Government’s handling of the economy. We are doing everything possible with the powers currently available to us to support businesses and transform Scotland’s economy.

“Our New Deal for Business Group to reset the relationship between government and industry, is focusing on co-designing policies that will have a positive impact on the day-to-day operations of business. The Group’s first set of recommendations have been accepted by the First Minister and we are in the process of implementation.”

Scottish Labour Economy spokesperson Daniel Johnson said “These dire stats show the SNP and the Tories have abandoned any shred of ambition for our economy and settled instead for managed decline. 

“Their record of disastrous economic failure has left us all poorer – damaging businesses, driving down wages and starving public coffers of funds.

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