Scottish Gross Domestic Product grew by 0.2 per cent in the most recent quarter, according to official figures published by the Scottish Government’s Office of the Chief Economic Adviser. The rate is below the UK figure of 0.4 per cent reported by the Office for National Statistics for the same period.
Growth was driven by the services sector, which expanded by 0.3 per cent. Production contracted by 0.4 per cent and construction fell by 0.1 per cent. Agriculture, forestry, and fishing rose marginally.
The figures follow a stronger previous quarter in which Scottish GDP rose by 0.5 per cent. The slowdown reflects broader UK trends, with the Bank of England noting softer demand across consumer facing sectors through the early part of the year.
Jane Thomson, senior economist at the Fraser of Allander Institute at the University of Strathclyde, said the data showed an economy continuing to grow but at a subdued pace.
“The Scottish economy is expanding, but the margin is small. Services growth is offsetting weakness in production and construction, and that pattern looks likely to continue through the next quarter unless interest rates start to fall more decisively,” Thomson said.
The production sector’s contraction was led by manufacturing, which fell 0.6 per cent. Electricity, gas, and water supply activities held broadly steady. Mining and quarrying, which includes oil and gas extraction, registered a small decline.
Finance Secretary Shona Robison said the figures reflected a challenging economic environment for Scotland and the UK.
“Growth remains positive but the pace is slower than we would want. The Scottish Government continues to support businesses through targeted interventions, and we are calling on the UK Government to release additional investment capacity for Scotland,” Robison said in a statement accompanying the release.
Scottish Conservative economy spokesperson Murdo Fraser said the figures showed the need for structural reform. “Scotland is growing more slowly than the rest of the UK. That is a concern and the Scottish Government should be looking at its own policy choices before blaming Westminster,” Fraser said.
The Fraser of Allander Institute’s most recent forecast suggested Scottish growth of 1.1 per cent for the current calendar year. That compares with Bank of England projections of 1.4 per cent for UK growth over the same period.
The Scottish Fiscal Commission is due to publish updated independent forecasts alongside the next Scottish Budget. These will inform the Finance Secretary’s tax and spending announcements.
The Office for National Statistics will publish preliminary estimates for the next quarter in approximately ten weeks, followed by Scottish Government regional breakdowns two weeks later.
Author bio
Iain MacPherson is the Editor of Business News Scotland. He has covered the Scottish economy for fifteen years and holds a degree in economics from the University of Strathclyde.
