Recovery in the Scottish economy is forecast to continue this year but will remain weak with little hope of a sharp increase in growth, according to a new report published today by Scotland’s leading independent economic research institute.
The commentary, provided quarterly by the University of Strathclyde’s Fraser of Allander Institute, suggests growth in Scotland is forecast to remain fragile over the next few years as the downturn in the North Sea continues to bite and weak levels of consumer confidence put a curb on spending.
The report finds:
- The Institute’s new central forecasts are for economic growth of 1.2% in 2017, 1.3% in 2018, and 1.4% in 2019 – broadly unchanged since December’s forecasts.
- The downturn in the North Sea – alongside lower levels of overall confidence in the economy – suggests that the Scottish economy will continue to lag behind the UK as a whole.
- Over the 10 years since the start of the financial crisis, the Scottish economy has grown by an average of just 0.7% each year – less than a third of its long-term trend. It is no surprise, therefore, that whilst unemployment rates remain close to record lows, the incomes of most households continue to be squeezed.
- Getting the economy moving again must be a key priority for policymakers from all political parties.
The Fraser of Allander Institute (FAI) is a leading economy research institute based in the Department of Economics at the University of Strathclyde, Glasgow.