GDP falls

Scotland’s economy shrank by 0.3% in February

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Activity contracted in February

UPDATE 2 May: Scotland’s onshore GDP contracted by 0.3% in February, following unrevised growth of 0.6% in January, according to statistics announced by the chief statistician.

In the three months to February, GDP is estimated to have grown by 0.4% compared to the previous three month period.

Output in the services sector, which accounts for around three quarters of the economy, contracted by 0.7% in February. The production sector grew by 2%, while the largest contribution to overall GDP came from growth in the output of manufacturing.

In 2023 Scotland’s GDP grew by 0.1% compared to 2022, revised down from 0.2% in the first quarterly estimate of GDP.

Scottish Labour Economy spokesperson Daniel Johnson said “This incompetent and economically illiterate SNP government has left Scots poorer and public finances in turmoil. 

“Under the SNP, Scotland’s economy is flatlining and our vast potential is being squandered.”

Scotland Secretary Alister Jack said: “Long-term sustainable growth remains our goal, and with inflation expected to fall to our 2% target soon, we’re on track to achieve that. We must stick to our plan.”

KPMG forecast

Gradual economic recovery and steady growth over the medium term are predicted in the first ever Scottish Economic Outlook report from KPMG.

The forecast shows growth of 0.4% for the Scottish economy this year, similar to the rest of the UK, but relatively weak by historical standards, with that expected to rise to 1% in 2025.

Risks to these numbers include potential supply chain disruptions, particularly for the manufacturing sector, but, on the upside, looser financial conditions could see a pickup in business investment and potentially stronger productivity leading to higher economic growth.

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