Scottish economy forecast to see slow, steady growth

Growth of 0.4% for the Scottish economy is forecast this year.

PA Media

2nd May 2024

Posted in

Economy

Scotland’s economy is predicted to see slow but steady growth in the medium term, according to the first Scottish economic outlook report from KPMG.

The auditing firm said the economic momentum is likely to be propelled by consumer spending thanks to a recovery in incomes and a relatively low propensity to save.

But the outlook for business investment is weaker, with uncertainty expected to persist into next year.

The forecast shows growth of 0.4% for the Scottish economy this year, similar to the rest of the UK, with that expected to pick up to 1% in 2025.

KPMG aims to produce updated outlooks for Scotland twice a year, every year.

Yael Selfin, chief economist at KPMG in the UK, said: “While our forecast shows weaker growth momentum compared with the pre-Covid decade, there are nonetheless some reasons for optimism.

“We expect consumer demand to remain relatively solid, while the adoption of new technologies could boost productivity growth in the medium term.”

James Kergon, senior partner at KPMG Scotland, added: “Businesses in Scotland will have to adjust to the long-term challenges facing the economy, including slowing population growth and a secular decline in the oil and gas activity.

“Those able to turn this into opportunity will stand ready to reap advantages of the energy transition, while the productivity gap with the rest of the UK offers scope for catch-up growth.”