Coronavirus: Scottish economy ‘may not fully recover until 2023’

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Scotland’s economy may not return to pre-pandemic levels until the start of 2023, the government’s chief economist has warned.

Official figures show that, in the first half of May, almost a fifth of businesses were temporarily closed.

That contributed to more than 750,000 workers being furloughed “or unable to work as normal”.

The monthly economic brief also showed that turnover was down in almost every sector of the economy.

It highlights that:

  • Economic activity in April fell to historic lows as businesses were required to close to prevent the spread of Covid-19
  • Activity is expected to pick up in the coming months as businesses prepare for the gradual reopening of the economy
  • However, significant uncertainty in the economic outlook remains
  • Unemployment is rising from its pre-Covid-19 lows and could increase to more than 10% this year, although the Job Retention Scheme is helping to contain this.

Economy Secretary Fiona Hyslop said the Scottish government was “working tirelessly to keep businesses afloat and ensure as few people as possible lose their jobs”.

She added that more than £2.3bn had been offered to businesses to support them through the crisis.

‘Path to recovery’

This included £104m from the Scottish Government Business Support Fund to help “more than 2,500 businesses and 4,160 self-employed people in the space of just a month”.

“It is critical that we now gradually reopen the economy, following the route map out of lockdown that we have drawn up in close consultation with business organisations, trades unions and regulators,” Ms Hyslop said.

“During this critical phase we will continue to work with employers so that they can safely get back to work and help the economy on its path to recovery.”

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