Scotland’s economic recovery in the wake of the coronavirus pandemic over the next two years could outpace the UK average, a forecast from KPMG has suggested.
Figures estimate the country’s economy took a 9.6% hit in 2020 with the impact felt in almost every sector, while across the UK there was a drop in GDP of 9.9%.
But the latest “best-case” analysis from KPMG suggests a continuing successful vaccine rollout and a potential post-restrictions “consumer bounce” could result in Scotland recording annual GDP growth in 2021 of up to 5.5%, and 4.6% UK-wide.
This would grow again to 5.8% in 2022, compared with 5.6% across the UK.
Catherine Burnet, KPMG’s regional chairwoman in Scotland, said: “Our latest economic forecasting undoubtedly offers some optimism, but with a big slice of caution.
“While it’s reassuring to see that GDP could be completely back to pre-Covid levels of growth within two years, the figures don’t account for the many jobs and valued businesses that may be lost forever as the pandemic rumbles on.
“Last year we warned of a potential ‘two-speed’ recovery with some regions of Scotland suffering far harder than others. As the picture has become clearer, we’re finding that there’s less of a geographical division and more of a sector-by-sector imbalance.
“While the country’s already flourishing tech, biotech and medical industries have continued to grow and attract international investment, there’s no escaping from the devastation that Covid has created in hospitality, retail and travel and tourism.
“The Scottish Government’s road map out of restrictions, coupled with our latest economic modelling and the Cop26 summit in Glasgow this November, offer real hope that we have an opportunity to build back and regain lost ground with a focus on a truly sustainable, green recovery.
“But to achieve this we’ll need business and political leaders to work more collaboratively than ever before on a strategy that ensures Scotland’s long-term success.”
GMB Scotland secretary Gary Smith said: “It’s a concern when forecasts for Scotland’s economic future factor a green recovery that doesn’t exist and for which there is no plan whatsoever.
“Scotland has one of the biggest offshore wind sectors in the world but almost no jobs in the manufacturing and fabrication that supports it, we export those green jobs to the rest of the world.
“In our biggest city Glasgow, which will host Cop26, we have an environmental crisis in cleansing and refuse, but instead of investing in more jobs to tackle it the council signed off another cuts budget.
“Optimism isn’t warranted when you look at what’s actually happening, and without a proper jobs plan and investment strategy the outcome won’t be recovery, it will be failure.”