Scotland’s economic growth ‘to fall amid coronavirus slump’

The ongoing coronavirus pandemic has seen KPMG revise its forecast for Scotland from 6.8% to 9.1%.

Scotland’s economic growth is expected to fall by 9.1% according to latest predictions.

The ongoing coronavirus pandemic has seen KPMG revise its Gross Value Added (GVA) forecast for Scotland from a 6.8% drop to a fall of 9.1%.

For the whole of the UK, the accountancy firm is forecasting GDP decline of 10.3% for 2020, downgraded from 7.2% predicted in June.

However, both economic measures are expected to see a recovery in 2021 – increasing by 8.2% and 8.4% respectively – if a working Covid-19 vaccine is available by April.

With the assumption that a vaccine for coronavirus is rolled out next year, KPMG predicts that the economy can return to pre-pandemic levels by early 2023.

The forecasting model suggests that, economically, Orkney and Shetland will be Scotland’s worst-affected regions, with drops in GVA of 11.4% and 11.1% respectively.

East Renfrewshire is forecast to face the lowest impact, with a reduction in GVA of 7.4%.

Edinburgh’s GVA is predicted to contract by 7.7% in 2020, while Glasgow is forecast to experience a fall of 8.6%.

Catherine Burnet, KPMG’s Scotland chairwoman, said: “Our latest revised forecasts for Scotland highlight the scale of uncertainty facing the country over the coming months.

“The next six months could provide the greatest challenge as the business community wrestles with both the ‘new normal’ of a post-Covid-19 world and a potential hard Brexit.

“Across the country there appears to be some significant differences in the forecast short-term impact of coronavirus, which raises concerns that we could face a two-speed recovery with some regions struggling to regain lost ground.

“As vaccine research continues, the need now is for business and political leaders across Scotland to work collaboratively and set out a clear action plan to restore consumer confidence and long-term, sustainable economic growth.”

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