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:
- Perspective 1 – Reopening The Workplace: A resilient leader’s guide.
- Perspective 2 – Planning for Scotland’s Future
- Perspective 3 – Re-thinking our Global Economic Future
- Perspective 4 – The impact of the coronavirus on our economy and society – views from 17 experts
- Perspective 5 – The Impact of Covid-19 on Scottish Small and Medium-Sized Enterprises (SMEs)
- Perspective 6 – A prelude to ‘building back better’ – how well have we tackled inequalities since the last recession
- Perspective 7 – The outlook for the Scottish Budget for 2020 and beyond
- Perspective 8 – The Economics of Parenting: Children and Inequality at a time of shutdown
- Perspective 9 – What can we learn from previous pandemics and from the response to Covid-19 so far?
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 Fellow 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 economist at the Fraser of Allander Institute working across a number of projects areas. He has a Masters in Economics from the University of Edinburgh, and a degree in Economics from the University of Strathclyde.
His main areas of focus are economic policy, social care and criminal justice in Scotland. Ben also co-edits the quarter Economic Commentary and has experience in business survey design and dissemination.
James is a Fellow at the Fraser of Allander Institute. He specialises in economic policy, modelling, 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