While many parts of the world continue to introduce new lockdown measures – there is tentative optimism for the year ahead, according to the latest Economic Commentary by the Fraser of Allander Institute at the University of Strathclyde.
As we speak, initial rollouts are beginning of vaccines that will aim to ensure that 2021 will be a better economic year for Scotland than 2020.
Despite this welcome news, it will take some time for the country to get to a point where significant restrictions can be eased. This will continue to have a particular heavy toll on key sectors in our economy, such as tourism and hospitality. Moreover, the roll out of a sustained vaccination programme across the world will take many months, meaning that the global outlook – crucial for Scotland’s exports and investment prospects – remains hugely challenging.
As a result, the ongoing economic crisis remains severe: there is still a hard recovery to come. With unemployment soon to rise, and a renewed squeeze on wages across the public and private sector, it will feel like Scotland is in a recession for some time yet.
Economic Perspective articles:
- Perspective 1 – “Scotland’s Budget Report 2020”, David Eiser
- Perspective 2 – “Estimating the Elasticity of Substitution between Capital and Labour”, Julija Harrasova
- Perspective 3 – “A guide to Scottish GDP”, Milan Marcus & Adam McGeoch