Brexit stockpiling will give Scottish economy short-term boost, Scotland’s chief economist predicts

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Stockpiling ahead of Brexit is predicted to give the Scottish economy a short-term boost of up to 0.4 percentage points this year, according Scotland’s chief economist, Gary Gillespie.

However, that will be offset in the following years by a slowing down of output, he said, adding that “the overall effect of stockpiling on the economy is negative in the medium term”.

Annual economic growth in the first half of 2018 reached its highest level in four years in the second quarter of 2018, according to the annual State of the Economy report, published today.

GDP growth in Scotland was 0.5 per cent in the second quarter of 2018, while annual growth reached 1.7 per cent – its highest rate since 2014.

Scottish growth slightly outstripped that of the UK as a whole, which was 0.4 per cent in the second quarter. 

While the increasing oil price has contributed to the economic growth and wider business confidence across the supply chain, other goods exports also grew by six per cent.

Unemployment in Scotland is at 3.9 per cent, lower than the UK level of four per cent and just above a record low for Scotland of 3.8 per cent.

Economy Secretary, Derek Mackay said: “Following the very positive GDP data published last month, showing Scottish GDP growing and outpaced growth in the UK as a whole, I welcome this latest State of the Economy report which provides a broader analysis of Scottish economic performance.

“With Scotland’s economy continuing to grow throughout the year, it’s good to see the improving outlook for the oil and gas sector coming to fruition alongside the continued strong performance in our labour market.

“Scotland’s economy is strong and we are one of the top destinations for inward investment, whilst Scottish productivity has grown faster than the UK’s over the past decade.

“We are using the powers we have to boost the economy and ensure our economic potential is realised at the same time as we try to mitigate the damage Brexit will cause.”