The latest quarterly report from the Fraser of Allander Institute at Strathclyde University (pictured) claims that Scotland’s recovery from recession has been built on debt-fuelled spending by families and cannot be maintained without a large increase in exports and investment. The independent economic body said that “genuine sustainable recovery can only be guaranteed if Scotland vastly increases its exports and business investment, rather than through another consumer-led boom.”
However, the report also forecasts that Scottish GDP will grow by 1.3% in 2013 — up from the previous forecast of 0.9% in the summer — and the 2014 forecast is also revised (up from 1.6% to 1.8%). Growth for 2015 is predicted to be 2.1%, unchanged from the previous estimate.
The report also says that Scotland is witnessing a “more robust recovery”, with new jobs being created and unemployment falling. Scotland can expect 21,200 net new jobs in 2013, rising to 27,200 in 2014 and 38,400 in 2015, most in the service sector.
On exports, the report said that there have been “signs of improvement” in 2013, but “performance remains weak. The slow recovery across Europe and in the UK will continue to hamper Scottish exports. The robustness of the recovery in the UK as a whole, which is the largest market for Scottish goods and services, will be critical for the ability of Scotland’s economy to generate exports and grow.”
Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “The up-rating of the forecast of Scottish economic growth both this year and next is extremely welcome. That said, we are in full agreement with the institute’s assessment that growth remains fragile in the absence of a tangible pick-up in investment.”