Scotland’s economy rebounds in June but still almost 20 per cent down on pre-Covid levels

New statistics estimating the growth in Scotland’s economy has said the country is beginning to see a slow recovery.

Scotland's GDP is estimated to have grown by 5.7 per cent in June
Scotland's GDP is estimated to have grown by 5.7 per cent in June

Scotland’s economy is showing signs of the beginning of a slow recovery from the damage caused by Covid-19, new statistics today show.

For the second month in a row, Scotland has seen its GDP grow, but the economy is still significantly below pre-pandemic heights.

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New experimental statistics from the Scottish Government which estimate the growth of the economy by month states that Scotland saw growth in its GDP of 5.7 per cent compare to an increase of 2.3 per cent in May.

That follows drops of 19.2 per cent in April and 5.8 per cent in March, and comes after it was officially announced the United Kingdom faced its first recession in 11 years last week.

The statistical release states: “The unprecedented nature of this drop in output can be contrasted to the financial crisis and recession in 2008 and 2009, where GDP decreased by around 4% over the course of 18 months.”

Despite the improvement in the economy’s performance, the country is still 17.6 per cent below pre-Covid-19 levels, but the increase in GDP in June is being linked to a “wider pickup in activity”.

All of the main sectors of the economy have seen increases in activity, but estimates for the whole of the second quarter of the year (April to June) suggest a drop in GDP of 19.7 per cent compared to Q1 figures of a drop of 2.5 per cent.

Since Q4 of 2019, the economy is estimated to have suffered a 21.7 per cent drop in GDP.

The figures are said to be “broadly similar” to patterns seen elsewhere in the UK, the release said.

Scottish Liberal Democrat leader Willie Rennie called on a reintroduction of the planned childcare allowance which was suspended due to Covid-19.

He said: "We are still in a world of uncertainty. Scottish GDP was sluggish even before the virus struck.

"It is important for the Scottish Government to take new steps to promote prosperity. That should include reversing their decision to halt the expansion of childcare for a whole year. There is no route to a strong economic recovery that does not include strong childcare services."

Green co-leader Patrick Harvie said the figures were “yet another reminder” that GDP figures are a “terrible measure of economic progress”.

He said: “The fact that we’re seeing GDP growth at the same time as people are losing their incomes and livelihoods, small businesses are closing and many people face losing their homes, is yet another reminder that GDP is a terrible measure of economic progress.

"It doesn’t get close to telling us the whole story about our state of economic health. The Scottish Government claims it wants a Wellbeing Economy, but it hasn’t begun to define what this means yet.

"This task is urgent as Scotland copes with this crisis, and seeks to build back better and create a fairer, greener and more equal economy.”

Maurice Golden, the Scottish Conservative’s economy spokesman said: “It’s clear that Scotland’s economy is recovering from the pandemic slower than the rest of the UK and this is unfortunately going to hit Scottish jobs and incomes hard.

“The SNP government failed to give Scottish businesses the same support as their UK counterparts and failed to provide a concrete strategy to rebuild our economy.

“In stark contrast the Scottish Conservatives have already published a specific plan to boost our economy and Douglas Ross, Scottish Conservative leader will be publishing a jobs plan within weeks.”

The UK government’s secretary of state for Scotland, Alister Jack, said: “These figures confirm the significant impact of coronavirus on Scotland’s economy.

"We know that there are very real challenges ahead of us. The UK Government will continue to do everything possible, working with the Scottish Government, to support people in Scotland through this difficult time.”

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