Achi news desk-
John Swinney succeeded Humza Yousaf as First Minister of Scotland yesterday.
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EY Scotland managing partner Ally Scott said: “While political interference and instability within the business and entrepreneurial community is never welcome, Scotland has an opportunity right now to reset the sluggish trajectory of what many of our reports suggests it and set an active, pro-growth business. an agenda that can enable and accelerate a more vibrant and sustainable economy for the longer term.”
Commenting on the economic outlook and background, he added: “As the Scottish business community anticipates a change of policy from new political leadership, our forecast shows that the economy remains slightly behind, but tracking to to a large extent, trends we see at UK level. The decline at the end of the year was felt most strongly in the manufacturing sector, which suffered a sharp decline in Q4, and, although the services sector was generally flat, some private service activities are showing signs of improvement.
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“Households and some business sectors appear to be growing optimistic about the coming year, but a recovery in household finances and spending will take time to feed through to growth. GVA (gross value added) growth is forecast to be weak this year but momentum is forecast to build for a brighter outlook for 2025 and beyond.”
EY predicts that the Scottish economy will grow by 0.4% this year, on the GVA measure, which represents a downward revision from its previous prediction of 0.7% for expansion in 2024. The accountancy firm has also reduced its forecast for growth in the UK as a whole this year, to 0.6%.
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It has revised its forecast for Scottish growth in 2025 to 1.7%, from 1.4%, “with continued growth expected in subsequent years”.
Anyway. EY said that economic growth in Scotland over this period is also expected to lag behind the UK as a whole, and is forecast to show annual growth of 1.8% in 2025 and 2026, increasing to 1.9% in 2027.
EY noted that “much like the UK, the Scottish economy has not grown in two years”.
He added: “With politics dominating the current headlines at Scottish and UK level, there may be opportunities to consider revisiting the economic and business growth agenda, including migration policies that could stimulate the economy and ease labor market winds consistently seen in macroeconomic EY. prospects.”
EY predicts that Scottish employment will grow by an average of 0.8% per year between 2024 and 2027.
The accountancy firm notes that this lags the expected average growth of 1.1% per annum in the UK as a whole over the same period.
EY said: “[The] The Scotland-UK employment growth gap [is] partly due to under-representation in some sectors expected to see stronger employment growth, such as professional, scientific and technical services, and the administrative and support sector.”
