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Key points from our 2018 budget report

Today we publish our annual Budget report, “Scotland’s Budget 2018” which is available at the following link.

The aim of the report is to set out the opportunities, risks and choices facing the Scottish Government as it prepares it draft budget for 2019/20. The report covers the outlook for the Scottish economy and the Scottish budget.

Each year we also focus on a variety of longer term public finance questions. This year we focus on the options for reforming taxes and introducing new taxes, and discuss the differences in the funding of higher education between Scotland and England.Continue reading

October nowcast update on the Scottish economy

Grant Allan & Stuart McIntyre
http://www.nowcastingscotland.com
Fraser of Allander Institute, University of Strathclyde

Recent economic news on the Scottish economy has struck a slightly more upbeat note about the current pace of economic growth.

This comes on the back of growth over the year to June 2018 – whilst still below average – at its fastest since late 2014/early 2015 and the Scottish economy outpacing the UK for the last two quarters.

While, as set out in our latest Fraser Economic Commentary we remain cautiously optimistic, growth is likely to remain below trend for the duration of our forecast horizon. And overall, the immediate outlook for Scotland’s economy remains highly uncertain.

Against this backdrop, the latest nowcasts of economic growth in Scotland from our nowcasting model have been generated.

FAI Economic Commentary: Tackling regional economic inequalities

Tackling regional economic disparities has been a priority of successive governments in both the UK and Scotland.

The UK Government’s Industrial Strategy is their latest attempt, with regional growth 1 of 5 ‘foundations of success’. Here in Scotland, ‘cohesion’ – or its new term ‘regional inclusive growth’ – has been a feature of the Scottish Government’s Economic Strategy since 2007.

It is hard to disagree that a country will be economically stronger if every region has the opportunity to fulfil its potential.

However, Scottish and UK policy history is littered with well-intentioned – but ultimately ill-fated – attempts to narrow the gap in economic performance between regions. Many of the challenges are deep-rooted and structural, whilst attempts to tackle them throw-up challenging trade-offs and political risks.

Today’s Fraser of Allander Economic Commentary in 10 bullet points

Today we published our latest Economic Commentary.

Alongside our analysis of the Scottish, UK and global economies, we include the following articles:

Reappraising Scotland’s exports and their geographies: Brexit and beyond, Ronald V. Kalafsky (University of Tennessee) and Ross Brown (University of Strathclyde)
Monetary and fiscal policy in a newly independent Scotland: lessons from the dissolution of Czechoslovakia?, Frantisek Brocek (University of Strathclyde)
Highlighting the need for policy coordination: the economic impacts of UK trade-enhancing industrial policies and their spill-over effects on the energy system, Andrew Ross et al. (University of Strathclyde)

Today’s Commentary also includes an examination of the hot topic of regional inclusive growth.

In this blog, we summarise some of the key points from our latest outlook.

August nowcast update!

We have updated our nowcasting model for the Scottish economy with the latest official statistics and survey data to produce new estimates of economic growth in Scotland in Q2 and Q3 of 2018.

Our nowcast for GVA growth in 2018 Q2 is 0.33% which, at an annual rate, is 1.34%.
Our first nowcast for GVA growth in 2018 Q3 is 0.39% which, at an annual rate, is 1.57%.

Relative to our last nowcast update our estimate for Q2 2018 has improved very slightly (up from 0.32%), but on balance the figures still suggest relatively weak growth.

This week, we’ll get revised official data for the Scottish economy when the next set of National Accounts are published. Summer is usually when more substantial revisions are put through the economic accounts – following publication of the latest Input-Output tables for Scotland in July each year – and these are likely to alter the pattern of past growth in Scotland. We’ll provide a short blog summarising these key changes.

All of this will be followed by – on the 19th of next month – the first set of official data covering the performance of the Scottish economy over the period March – June (Q2).

We’ll pick this issue up in more detail, as well as review the wider economic landscape, in the next Fraser Economic Commentary to be published in late September.