World Economy

Scotland Economy to Slow

Scotland Economy to SlowScotland Economy to Slow

Scotland’s economy is expected to slow over the next couple of years due to political and economic uncertainty, according to experts.

The EY Scottish Item Club 2017 Forecast predicts output growth for 2016 to be 0.7% and 0.4% in 2017. This compares with UK GDP growth rates of 1.9% and 0.8% respectively, Scottishnews reported.

The independent economic forecasting group predicts modest growth is expected to return from 2018. The future outlook, however, depends on the economic landscape shaped by Brexit, policy changes from a Donald Trump US presidency, and new tax powers from the Scottish government.

Economists say the recent fall in the value of the pound has led to a pick-up in manufacturing exports orders, but the downside of the currency depreciation is expected in 2017 as rising import prices hit both business costs and consumers’ pockets.

Dougie Adams, senior economic adviser to the EY Scottish Item Club, said: “During the last 12 months, Scottish growth has been challenged by various economic factors. The unsustainable growth from the construction sector has waned as expected and the impact of low oil prices continues to reverberate through the economy.

“A few sectors performed well in the first half of the year resulting in patchy growth, with private services delivering the strongest performance at 2.6%, just shy of the UK’s level of 3%.

“Although manufacturing output as a whole fell by 3.6%, the food and drink sub-sector surged by 9%.”

The cities of Aberdeen, Dundee, Edinburgh, Glasgow, Inverness, Perth and Stirling account for 45% of total employment in Scotland and more than 55% of business services employment.



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