GDP growth outperforms UK in first three months of 2023, figures show

Scotland has seen higher GDP growth than the UK as a whole despite the “extremely challenging circumstances” facing the economy, a leading member of the Scottish Government said.

Wellbeing Economy Secretary Neil Gray was speaking after statistics published by the Scottish Government revealed the country’s economic output grew by 0.4% in real terms during the first three months of 2023 – compared to 0.1% for the UK.

GDP in Scotland is now up by 0.3% on the period January to March last year – with this again higher than the growth of 0.2% across the UK.

According to the data, output in the services sector – which makes up just over three-quarters of the economy in Scotland – increased by about 0.2% in the first quarter of 2023.

Output in the construction sector was up 0.7%, with the production sector growing by 0.8% over the period.

Mr Gray welcomed the figures, but stressed people and businesses are still struggling amid the cost-of-living crisis.

He said the statistics “demonstrate the resilience of the Scottish economy against the extremely challenging circumstances faced by countries around the world”.

While he added that economic experts at the Scottish Fiscal Commission are now forecasting Scotland will avoid a recession, he cautioned: “Enormous pressures remain across both the private and public sectors.

“The cost-of-living crisis is impacting household and businesses’ ability to spend, which in turn affects the wider economy.”

Mr Gray said Brexit is continuing to have “a significant impact on businesses in terms of staffing”.

He said Scottish ministers are “doing everything possible with the powers currently available to us to support the people of Scotland and deliver an economy that is fair, green and growing”, but he added the situation has been “worsened by the UK Government’s handling of the UK economy”.

Scottish Secretary Alister Jack said: “Our economic outlook is looking encouraging with the first quarter of this year showing strength due to the swift action of this Government to avoid recession.

“The UK Government is creating jobs, boosting trade and encouraging investment with more than £2.2 billion invested across Scotland to encourage prosperity.

“Our priority is to halve inflation, reduce debt and grow the economy for the benefit of the whole of the UK.”