PwC outlines expected Scottish GDP growth in 2021 - but fears full recovery could take until 2024
Scotland’s economy could grow by up to 4.6 per cent this year, as it begins to recover from the slump created by Covid-19, but could take until 2024 to bounce back fully, PwC is predicting.
The accountancy giant in its latest UK Economic Outlook report said that after an estimated drop of 10.6 per cent in gross domestic product (GDP) last year, the economy north of the Border is expected to grow by between 3.6 per cent and 4.6 per cent in gross value added (GVA) terms in 2021, depending on the speed of the recovery.
It comes after provisional statistics released by the Scottish Government yesterday showed a 0.3 per cent fall in GDP from November.
For the UK as a whole, PwC believes the UK economy will see negative growth in the first quarter of up to -2.8 per cent, and it forecasts a gradual return to growth from the second quarter, with Scotland’s rebound slightly ahead of the UK, buoyed by the spread of its sectoral coverage.
Additionally, PwC projects that on average in 2021 the UK is expected to recover between 30 per cent and 42 per cent of the loss in output caused by the pandemic – equivalent to between about £2,100 and £2,900 per household.
Scotland is expected to recover about 43 per cent of lost output from 2020 under a quick recovery scenario.
Stewart Wilson, head of government and public sector for PwC Scotland, commented: “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 per cent, and while this is ahead of the pre-pandemic growth rate, it must be remembered that we begin this recovery following a 10 per cent fall in the economy last year, meaning we expect the UK economy to be 3.1 per cent to 4.6 per cent 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.”
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