SCOTLAND’S economy could grow by as much as 4.6% this year according to PwC projections, as the country begins to recover from the slump created by the Covid-19 pandemic.
After an estimated drop of 10.6% GDP in 2020, PwC’s latest UK Economic Outlook shows that Scotland’s economy is expected to grow between 3.6% and 4.6% in GVA (Gross Value Added) terms in 2021, depending on the speed of the recovery.
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The most recent official figures show that Scottish economic output is 7.2% below the level in February 2020 – before the direct impact of the pandemic was felt. The economy is estimated to have fallen by 0.3% in December.
A return to lockdown restrictions – including a closure of retail and hospitality venues – means Scotland will likely see that compounded, with the UK economy expected to see negative growth in the first quarter of between -2.0% and -2.8%.
PwC forecasts a gradual return to growth in the UK from the second quarter, leading to 3.4% to 4.6% growth for the full year – with Scotland’s slow recovery growth of 3.6% slightly ahead of the UK.
Stewart Wilson, PwC Scotland head of Government and Public Sector, said: “We expect growth to return to the economy after a bumpy first quarter heavily impacted by the continuing lockdown. A slow recovery will see growth in Scotland of 3.6%, and while this is ahead of the pre-pandemic growth rate, it must be remembered that we begin this recovery following a 10% fall in the economy last year, meaning we expect the UK economy to be 3.1% to 4.6% below the pre-crisis mark by the end of this year.
“We predict that growth in Scotland will accelerate in 2022, however economic activity is not expected to recover to pre-pandemic levels before 2023 – and further restrictions could push back the recovery timeline to the middle of 2024.”
