Brexit impact on Scotland’s economy

Brexit uncertainty resulted in significantly lower growth for the Scottish economy in 2019, a report has found.

The latest State of the Economy report, published by the Scottish Government’s Chief Economist Gary Gillespie, says despite the immediate risk of a ‘no deal’ Brexit being removed, uncertainty remains - particularly for those reliant on new trade agreements.

The report documents how:

• recent performance of the Scottish economy has been dominated by Brexit, with the uncertainty impacting growth and business investment
• Scotland’s labour market has continued to perform strongly by historical standards, however employment levels have fallen over the year
• consumer and business sentiment weakened in 2019 and continues to risk growth
• the outlook for 2021 and beyond is crucially dependent on the shape of any future EU trade deal and the impact of businesses adjusting to additional requirements to trade both in terms of costs and access

Public Finance Minister Kate Forbes said:

“We were clear from the outset that Brexit would damage our economy and that the best option for the future wellbeing and prosperity of Scotland was to stay in the European Union. As the First Minister said this week, we are leaving the EU at a time when we have never benefited from it more, and when we have never needed it more to achieve our ambitions.

“Trade agreements shape the nature of our economy and the situation we are in presents a particular challenge to exporters as we are taken out of the world’s biggest single market, which is around eight times bigger than the UK market.

“As a responsible government we will continue to take steps to protect jobs and our economy from further damage caused by Brexit but not every impact can be mitigated.

“We believe the best option for Scotland is to become an independent country within the European Union. Whatever our constitutional future, Scotland will remain an outward facing, constructive nation, working closely with our European partners.”

Background:

State of the economy: February 2020