Page last updated at 23:27 GMT, Tuesday, 28 April 2009 00:27 UK

Warning over Scots recession date

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Independent experts have predicted the downturn running into 2010

Scotland may have been in recession since the middle of 2008, the Scottish Government's chief economic adviser Andrew Goudie has suggested.

Official figures released in April confirmed Scotland fell into recession at the end of last year.

But Dr Goudie suggested this may have happened in "mid 2008".

He also cited predictions the downturn in output could go on into 2010 - but warned there was still uncertainty over how long the recession would last.

GDP statistics showed Scotland went into recession in the final three months of 2008, with falls of 0.8% and 1.7% in the last two quarters.

In a briefing for the Scottish Parliament's economy committee, Dr Goudie said there was "clear evidence" that Scotland's economy weakened in the second half of last year, in line with conditions in other countries.

There is still a significant degree of uncertainty over these forecasts, the scale of the downturn in the Scottish economy and the timing of the recovery
Andrew Goudie

"Output in the Scottish economy contracted sharply in the third quarter of 2008 and the backward-looking business surveys highlight that Scottish firms have reported further declines in output in late 2008 and early 2009," he stated.

"Evidence suggests that the Scottish economy has been in recession since mid-2008."

Citing independent forecasts from the Fraser of Allander Institute and Cambridge Econometrics, Dr Goudie pointed to predictions that economic activity in Scotland could drop in 2009 by as much as 2.7% - and spill over into 2010.

"However, there is still a significant degree of uncertainty over these forecasts, the scale of the downturn in the Scottish economy and the timing of the recovery," he stated.

Dr Goudie said Scotland's economic situation would depend on a series of factors, including changes in the availability of credit and the depth of the economic crisis globally.

Unemployment in Scotland rose by 5,000 over the three months to the end of March, although the rate remained lower than elsewhere in the UK.



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