Scottish economic recovery 'stalled' in first three months of 2010

Published on Wednesday 21 July 2010 13:15

ECONOMIC recovery stalled in the first three months of this year, official figures today showed.

• New figures indicate that the Scottish economy stalled earlier this year

Scotland's economy recorded no growth (0%) between January and March after gross domestic product (GDP) rose by 0.3% in the final three months of last year.

The country had only emerged from recession in those last three months of 2009, after more than a year in downturn.

Over the year to March, GDP dropped in Scotland by 3.5%, today's figures show.

Finance Secretary John Swinney said: "Clearly Scotland's different economic cycle and stronger past performance means that there is a lagging effect in terms of recovery – and the severe winter weather will undoubtedly have impacted on key parts of the economy at the beginning of the year.

"Building a strong and sustained recovery is our priority – and the fragility of the situation confirms that the UK Government is risking recovery by cutting too quickly too deeply, and that the Scottish Government was correct to defer further Westminster cuts to next year in order to support economic activity and employment now."

Today's figures do not mean that Scotland has dropped back into recession which is defined by two consecutive quarters of negative growth.

But the Scottish service sector fell by 2.4% in the year to March, according to today's figures.

The production sector dropped by 7.1% and the construction sector fell 8.3%.

During the first quarter of 2010, the service sector fell by 0.2%, the production sector remained unchanged while construction grew by 2.8%.

The GDP growth of 0.3% in the final three months of last year has been revised up from 0.2%.