SCOTLAND’S economy is forecast to grow by 1% in 2020 – with experts saying Brexit “remains a risk” to the economy.
The Scottish Fiscal Commission has published a range of economic forecasts alongside the Scottish Government’s Budget for 2020-21.
It predicted that GDP will increase by 1% this financial year, rising to 1.1% next year and 1.2% in the following year.
Meanwhile, employment is forecast to remain stable at 2.65 million this year, before increasing to 2.66m in each of the next three years.
Brexit negotiations and uncertainty over the timing and nature of the UK’s departure from the European Union has “resulted in subdued growth over the last year”, the SFC report said.
Now the UK has left the EU “the unwinding of some Brexit-related uncertainty may support some additional growth”, it added.
But the SFC said that Brexit “remains a risk to continued economic growth”.
The forecast trade has worsened by fears of global trade stand-offs and the impact of the coronavirus pandemic, researchers warned.
READ MORE: Scot rural areas to lose millions in funds after Brexit
The report said: “Concerns remain about slowing global growth, particularly in the Euro area, and this is expected to affect Scotland’s trade prospects.
“The outlook for trade has been exacerbated by the potential for global trade wars and, more recently, the potential fallout from the coronavirus.
“Our estimate of productivity growth in Scotland has remained low and below our previous forecasts.
“As a result, we have revised down our forecast of trend productivity growth at the beginning of the forecast period.”
Public Finance Minister Kate Forbes said that the SFC forecasts “confirm that uncertainty around leaving the EU has already held back growth over recent years”.
She added that the European withdrawal “will continue to be bad for our economy, holding back growth in trade and productivity”.
The MSP, who yesterday presented the Scottish Budget, continued: “Despite these challenging conditions, the economy continues to grow.”
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