Scotland’s economy expected to pick up after ‘weak start’ to 2022

Analysis of the current economic landscape was carried out by experts at KPMG.

Scotland’s economy expected to pick up after ‘weak start’ to 2022 iStock
After coronavirus hit, Scotland’s economy contracted by 9.7% over 2020.

Economic growth in Scotland is expected to pick up from March after a “relatively weak start” to 2022, according to experts.

The easing of coronavirus restrictions are expected to boost the economy, with the economy anticipated to return to pre-pandemic levels of growth this year.

After coronavirus hit, Scotland’s economy contracted by 9.7% over 2020.

Scotland’s economy is predicted to grow by 4.8% this year, whilst GDP across the UK is forecast to expand by 3.8% over the course of 2022.

The analysis of the current economic landscape was carried out by experts at KPMG.

Yael Selfin, chief economist at KPMG UK, said GDP growth in Scotland will reach around three-quarters the rate of last year in Scotland.

“Our latest analysis suggests that the Omicron variant has not impacted growth significantly in Scotland,” she said.

“However, rising taxes and borrowing costs, as well as elevated inflation, will squeeze households’ purchasing power.

“And at the same time, the lingering effects of supply chain bottlenecks together with a persistent shortage of labour could constrain production this year.

“Nevertheless, after a relatively weak start to 2022 brought about by Omicron, growth should pick up from March, with overall GDP growth in 2022 reaching around three-quarters the rate of last year in Scotland.”

James Kergon, senior partner in Scotland for KPMG UK, said: “Ensuring our economy continues to grow is the only way to make sure Scotland comes back stronger after the pandemic.”

He said the latest economic forecasts will be “welcome news, especially for businesses in retail, travel and hospitality who have been the hardest hit in recent months”.

But he added: “While there are signs of optimism for some, there’s no doubt that 2022 will be another challenging year for some sectors.

“It’s my hope that we can kick-start a post-pandemic growth and make sure that Scotland’s businesses can focus on long-term growth, rather than survival.”