FAI Economic Commentary, 2020 Q2

The Scottish economy is now in its deepest recession in living memory, according to the latest Economic Commentary by the Fraser of Allander Institute at the University of Strathclyde.

The Institute points out that whilst the depth of the collapse in GDP is largely artificial and entirely due to the lockdown, what matters is how quickly activity bounces back once the restrictions are lifted.

All signs are however, that there will be some scarring and it will take some time before the economy recovers to a ‘new normal’.

The Commentary considers a range of scenarios from a more optimistic scenario where confidence builds momentum, through to a more pessimistic scenario which includes a second wave of infection.

In the optimistic scenario, the economy is projected to take until the end of 2021, at the earliest, to fully recover lost output. In the pessimistic scenario, it could be 2024 before a ‘new normal’ is reached.

The Institute also points out that even when the economy returns to growth, the underlying structure of Scotland’s business base will be altered forever.

Economic Perspective articles:

Authors

Graeme Roy

Graeme is Professor of Economics at the University of Glasgow, and formerly Director of the Fraser of Allander Institute

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Adam is an economist at the FAI who works closely with FAI partners and specialises in business analysis. Adam's research typically involves an assessment of business strategies and policies on economic, societal and environmental impacts. Adam also leads the FAI's quarterly Scottish Business Monitor.

Find out more about Adam.

Ben is an Associate at the Fraser of Allander Institute working across a number of projects areas including economic policy, social care and criminal justice.

James is a Fellow at the Fraser of Allander Institute. He specialises in applied analysis of trade and climate change. His work includes the production of economic statistics to improve our understanding of the economy, economic modelling and analysis to enhance the use of these statistics for policymaking, data visualisation to communicate results impactfully, and economic policy to understand how data can be used to drive decisions in Government.

David is Senior Knowledge Exchange Fellow at the Fraser of Allander Institute

 

 

Head of Research at the Fraser of Allander Institute

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Founded in 1975, the Fraser of Allander Economic Commentary is the leading publication on the Scottish economy and offers an authoritative and independent analysis of the key issues of the day.