Scottish Economic Bulletin July 2024

Economic Outlook

Economic growth forecast to strengthen moderately over 2024 and 2025.

• Economic conditions have strengthened in the first half of 2024 and are reflective of an outlook of moderately strengthening growth and lower, more stable inflation than in recent years.
• At a global level, the IMF in July forecast global growth to ease to 3.2% in 2024 before picking up slightly to 3.3% in 2025. However it sets out that the increased risks from persistent services inflation and trade tensions could result in interest rates remaining higher for longer, which could weigh on the outlook.^[19]
• At a UK level, the latest HMT average of new independent UK forecasts in July indicates growth with strengthen from 0.1% in 2023 to 1% in 2024 and 1.3% in 2025. Alongside this, inflation is forecast to rise to 2.5% later in 2024 before easing back to 2.2% in 2025.^[20]

• Most recently, the Bank of England forecast the UK economy to grow 1.25% in 2024, up from 0.1% in 2023, before growing 1% in 2025. Alongside this, inflation is forecast to rise to 2.7% at the end of 2024 before easing back to 2.2% at the end of 2025.^[21]
• In Scotland, the most recent forecast from the Fraser of Allander Institute in June projected Scotland’s GDP growth to strengthen from 0.1% in 2023 to 0.7% in 2024 and 1.1% in 2025. This is in line with the December 2023 forecast from the Scottish Fiscal Commission.^[22],[23]