The economies of Edinburgh and Glasgow will grow faster than the UK’s annual average of 1.6% GVA between 2020 and 2024, according to the EY Scottish Item Club Winter Forecast.
Edinburgh, Glasgow and Stirling, with an annual growth of 1.9% GVA, 1.7% GVA and 1.6% GVA respectively between 2020 and 2024, are all predicted to perform above the Scottish average pace of growth.
The Scottish economy overall is predicted to grow by 0.8% GVA in 2020 and narrow the growth gap between Scotland and the UK by 2022.
“The Scottish economy grew in 2019 by 0.9% GVA and will continue to do so in 2020 (0.8% GVA),” said the EY report.
“While it is expected to trail UK economic growth, 1.4% GVA in 2019 and 1.2% GVA in 2020, the growth gap between the two will decrease year-on-year from 0.5% GVA in 2019 through to 0.2% GVA in 2022 …
“Private services, which make up more than half of the Scottish economy, will continue to drive growth across the country by accounting for more than two-thirds of Scotland’s total GVA growth in 2020.
“The sub-sector; professional, scientific and technical activities will make the largest contribution – 20% of total growth …”
The report warns that its forecast shows a decline in the working age population of Scotland,” both through natural change and lower migration.”
It said net migration remains positive but has fallen consistently since 2016 when it was 32,000 — and this is now estimated to fall below 8,000, representing a 75% decrease.
“The situation is intensified by this report’s forecast that Scotland’s total population will peak earlier than previously anticipated, in 2021 at nearly 5.45 million,” said the report.
The report’s summary said: “We are undoubtedly in a significant period of change, when the 2020 transition deadline with UK leaving the EU approaches, but this typically also presents opportunities.
“Business and government must work in partnership to identify and capitalise on opportunities to drive continued, sustainable growth.
“Any assurances or initiatives to support continued business investment and ensure Scotland retains its ability to attract talented people to the Scottish workforce could prove to be pivotal to economic growth.”