Scottish GDP falls in December after arrival of Omicron

GDP in Scotland fell in the final month of 2021, new figures showed, with Economy Secretary Kate Forbes conceding the Omicron variant had made this a “difficult time”.

She spoke as the latest monthly data showed the economy contracted by 0.4% in December – with output 0.1% higher than the pre-pandemic level of February 2020.

The services sector, which makes up about three quarters of Scotland’s economy, flatlined with 0% growth in December.

Meanwhile, output in the production sector fell by 3.3% over the month, however, there was some  growth in the construction sector, which was up by 1.9%.

GDP is provisionally estimated to have grown by 1.3% in the last three months of 2021, with the economy now estimated to have grown by 7% over 2021 – after falling by 10% in 2020.

Ms Forbes said: “The emergence of Omicron at the end of last year meant that December was a difficult time for many, which is reflected in these figures.

“However, the resilience and ingenuity of our business community has lessened the impact, and it is encouraging to see sectors such as construction continue to grow.”

The Finance and Economy Secretary continued: “While we know our recovery remains fragile, and that many businesses have had an incredibly challenging time over the last two years, the Scottish Government is firmly focused on supporting our economy to recover.

“Since the start of the pandemic, businesses have benefited from more than £4.4 billion of support.

“This includes Covid-19 non-domestic rates reliefs which have saved businesses around £1.6 billion in reduced rates bills since 1 April 2020.”