Is Scotland’s economy forecast to
grow faster than the UK?
Unveiling his draft budget for 2019/20 in Holyrood, SNP Finance Secretary Derek Mackay boasted that GDP in Scotland has grown faster than the UK in 2018, but what about future growth?
The commission then expects the Scottish economy to grow by 1.2 per cent in 2019, 1 per cent in 2020 and 2021, 1.1 per cent in 2022 and 1.2 per cent in 2023.”
Finance Secretary Derek Mackay
Scottish Parliament, 12th December 2018
The Claim:
“The [Scottish Fiscal] Commission has revised up its forecasts for gross domestic product growth in every year. It now forecasts GDP in Scotland to grow by 1.4 per cent in 2018, which is faster than the growth expected in the UK as a whole.
The facts
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The Scottish Fiscal Commission (SFC) produces independent forecasts of Scotland's onshore Gross Domestic Product (GDP); while the Office for Budget Responsibility (OBR) provides the same role on a UK-wide basis.
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In 2018, the SFC has forecast GDP growth of 1.4 per cent in Scotland; while the OBR has forecast slower
UK-wide growth of 1.3 per cent.
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From 2019, the SFC has forecast that Scotland's GDP growth will fall behind that of the UK as a whole for the next five years.
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In 2019, Scottish growth is forecast to 1.2 per cent; while the OBR has forecast UK-wide growth will increase to 1.6 per cent.
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In 2020, Scottish growth is forecast at 1 per cent; whilst the UK's is forecast at 1.4 per cent.
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In 2021, Scottish growth is forecast at 1 per cent; whilst the UK's is forecast at 1.4 per cent.
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In 2022, Scottish growth is forecast at 1.1 per cent; whilst the UK's is forecast at 1.5 per cent.
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And in 2023, Scottish growth is forecast at 1.2 per cent; whilst the UK's is forecast at 1.6 per cent.
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What the experts say
“Growth in Scottish GDP is expected to be significantly lower than in the UK.This is primarily because of slower population growth in Scotland. Growth in per person GDP in Scotland is expected to converge with the UK, but will remain lower because of slower productivity growth in Scotland.”
The Scottish Fiscal Commission, Scotland’s Economic and Fiscal Forecasts, December 2018
Scotland in Union Fact Check Conclusion:
Derek Mackay gleefully reported to Parliament that GDP growth in Scotland is forecast to be just 0.1 percentage points higher than the UK as a whole in 2018.
What he omitted to tell MSPs was the forecast for the next five years. In each of those five years, the independent experts predict slower economic growth in Scotland than the UK as a whole.
As the Scottish Fiscal Commission makes clear, ‘growth in Scottish GDP is expected to be significantly lower than in the UK’.
Fortunately, as part of the UK, Scotland will benefit from economic growth across the entire country.
But if Scotland becomes independent, the Institute for Fiscal Studies has said the SNP’s ‘Growth Commission’ implies a fall in spending on public services of 4 per cent of GDP over the first decade. That means deeper austerity.
The best way for Scotland’s economy to flourish is as part of the United Kingdom.
Is Scotland’s economy forecast to grow faster than the UK?
Scottish GDP is expected to be significantly lower than in the UK.
Fortunately, as part of the UK, Scotland will benefit from economic growth across the entire country.
