THE annual Government Expenditure and Revenue Scotland (GERS) figures will be published on Wednesday, with a large increase in oil and gas revenues expected.

The official statement of Scotland’s finances is likely to suggest Scotland’s implicit deficit has reduced as a percentage of GDP.

Wednesday’s figures cover the 2022-23 year, where the war in Ukraine pushed oil and gas prices up significantly and the Treasury’s offshore revenues increased steeply.

The ongoing economic recovery from the pandemic will also affect Scotland’s onshore tax revenues.

The report has long been a key battleground in the debate on Scottish independence, with pro-Union supporters and politicians arguing it shows the benefits of the UK and those from the Yes side saying it can be used to show the direction of Scotland’s finances once it leaves. 

READ MORE: What is the GERS report and how is it calculated?

Ahead of the publication of the official statistics, economist David Phillips said Scotland’s share of North Sea resources would mean the implicit deficit will likely be down from the 2021-22 figure of 12.3% of GDP.

He told the PA news agency: “Despite a boost in oil and gas revenues and continued recovery from the Covid-19 pandemic, the cost of support with energy bills and surging debt interest payments saw the UK’s budget deficit increase from £122 billion in 2021-22 to £132 billion in 2022-23.

“However, today’s GERS figures will show that Scotland’s underlying, implicit deficit will have shrunk considerably over the same time period.

“That’s because a large majority of the increase in oil and gas revenues will be from activity in Scottish waters.

“But only a small share of the extra spending on energy bills support and debt interest relates to Scotland.

“The figures will therefore illustrate how, while oil and gas production continues, an independent Scotland’s public finances would be affected very differently by changes in oil and gas prices than the public finances of the rest of the UK.”

READ MORE: GERS and the independence debate: What do the figures really tell us?

He added: “Despite an improvement, Scotland’s underlying, implicit deficit will almost certainly remain a fair bit higher than that of the UK as a whole.

“This is somewhat different to what was expected a year ago when oil and particularly gas prices were at their highest, and it looked like Scotland’s deficit could fall below that of the UK as a whole for the first time in over a decade.

“How things will evolve this year (2023-24) and in the future will depend critically on what happens to oil and gas revenues, but also the performance of Scotland’s onshore economy and revenues.”

Wellbeing Economy Secretary Neil Gray will speak to the media following the publication of the GERS figures on Wednesday morning.