Global tourist hotspot Edinburgh 'at risk of economic hit'

Edinburgh is most susceptible to an economic hit due to Covid-19 restrictions as Scotland faces a loss of more than 8% in growth, according to a study.

KPMG is forecasting negative gross value added (GVA) north of the border of at least 8.1% in 2020.

The analysis, which is based on the sectoral make-up of Scotland, predicts Edinburgh – including the wider Lothians region – has the highest level of exposure.

This is due to spending by foreign tourists accounting for around 3.4% of the city’s economy – more than any other region in the UK.

Catherine Burnet, senior partner at KPMG in Scotland, said: “To some extent, the latest data is simply confirming what we all anticipated.

“It’s clear to see that the Covid-19 pandemic is transforming our everyday lives.

“The lockdown has hit industries like tourism and retail hard, and that’s undoubtedly going to take its toll on a vibrant, dynamic city like Edinburgh which has become a global tourist hotspot.

“Our forecast highlights the sheer scale of the challenge ahead.

“Conditions will be tough as we go through recession over the coming months, but there are reasons to be cautiously optimistic that some lost ground can be recovered in 2021.”

The study predicts a potential GVA growth in 2021 of 9%, assuming public health measures bring the pandemic under control by next year.