The Scottish Fiscal Commission has predicted that growth in the next two years will actually be better than expected both this year (18/19) at 1.4%, then 1.2% next year (2019/20).
But this is expected to slump to 1% in the two years following and 1.1% in 2022, then 1.2% the year after.
This has a knock-on effect on the Scottish tax base with a predicted £661million shortfall next year in devolved income taxes expected to be raised compared with predictions from May. It is also down by £519 million next year and £3.2 billion in the five years to 2023.
Mr Mackay told MSPs today; “The UK Government’s decision to take us out of the EU single market and the customs union - a market of over 500 million people - is reckless and unnecessary and our growth forecasts are subdued as a consequence.”
He also said he may have to ‘revisit’ the budget in the wake of a no-deal Brexit.
Mr Mackay said it was “disappointing but necessary” to inform Holyrood he was preparing for the event of a no-deal Brexit.
He said: “If Scotland is forced out of the EU as a result of the actions of the UK Government, it is vital that they ensure no detriment to the Scottish budget.
“As a responsible government, we are preparing as far as possible for all exit possibilities. We’re intensifying preparations in order to protect the Scottish economy, our businesses and our workers.
“A no-deal Brexit and continued chaos from the UK Government will only make matters worse. It’s disappointing but necessary for me to advise Parliament that if the UK does end up in a no-deal Brexit, I may be required to re-visit the priorities in this budget.”