Kate Forbes: Scottish GDP figures show resilience but recovery is still fragile

Scotland’s economic recovery from Covid “remains fragile”, the Finance Secretary has warned, despite the latest GDP figures recording estimated growth of 1.1% in January.

Monthly data showed that the economy is now 0.8% above the level it was at in February 2020, prior to the start of the Covid-19 pandemic.

Scottish Government statistics showed in the first month of 2022 that the service sector, which makes up about three quarters of the economy, grew by 0.9%.

Significant in this was a 2.4% increase in the retail, wholesale and motor trade subsector, although the report also noted there was a “strong contribution from the health and social work subsector, reflecting higher levels of test and trace and vaccination activity in response to the Omicron variant of Covid-19”.

Meanwhile, output in the production sector was up by 1.8% in January, with the construction sector also recording growth of 1.1%.

Finance and Economy Secretary, Kate Forbes, said the overall increase of 1.1% in GDP in January “shows the strength and resilience of Scotland’s businesses and our wider economy, driven by increasing output in manufacturing, health and consumer facing services”.

She added: “While we know our recovery remains fragile and our economy continues to face challenges from Brexit, the rising cost of living and the impacts of Russia’s illegal invasion of Ukraine, the Scottish Government is firmly focused on supporting our economy to recover.

“Since the start of the pandemic, businesses have benefited from more than £4.5 billion of support, including around £1.6 billion in rates relief – which is more generous than the other UK administrations so far.

“The newly published National Strategy for Economic Transformation will be fundamental to building on the progress we have made. Its five actions will shift the dial on the economy and support our transition to becoming greener, fairer and more prosperous.”