Fraser of Allander Institute

Department of Economics Fraser of Allander Institute

Fraser of Allander Economic Commentary

Founded in 1975, the Fraser of Allander Economic Commentary is the leading publication on the Scottish economy and offers authoritative and independent analysis of the key issues of the day.

The Commentary provides in-depth analysis of the current performance and future prospects of the Scottish economy, including short- and medium-term forecasts for economic growth and the labour market.

The Commentary also provides a platform for the dissemination of high quality research on issues facing the Scottish economy. It publishes articles from leading experts in academia, industry, policy and the third sector.

The Economic Perspectives and Policy sections of the Commentary contains accessible, policy-relevant research and commentary on the Scottish economy and wider economic and public policy issues.

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Latest Fraser of Allander Commentary

June 2019: volume 43, number 2

 

Scottish economy remains resilient, but Brexit uncertainty continues to erode long-term growth prospects 

Risks from new Fiscal Framework likely to hit Scottish Budget in years ahead

26 June 2019

The Scottish economy may have grown by its fastest rate in two years in the first quarter of 2019, but the risks to Scotland’s growth prospects have not gone away, says the University of Strathclyde-based Fraser of Allander Institute.

In its latest Economic Commentary, supported by Deloitte, the research institute highlights how much of the recent up-pick in growth is likely to have stemmed from firms implementing ‘no deal’ contingency plans. Underlying growth – particularly in key sectors of the economy – remains fragile.

Professor Graeme Roy, Director of the Fraser of Allander Institute, said: “Three years on from the Brexit Referendum, we still have little clarity over the timing or format of the UK’s departure from the EU.

“Given the scale of the challenges that a no deal Brexit might bring, it is no surprise that businesses are taking matters into their own hands by rolling-out contingency plans.

“Much of the Brexit debate has focussed upon the potential dislocation of trade patterns. But arguably an even greater challenge, particularly over the longer-term, are the implications for Scotland’s population.

“Our analysis shows that a significant amount of the long-term growth gap between Scotland and the rest of the UK can be explained by differences in population growth.

“Should Brexit make migration to Scotland more difficult, or less attractive, then this could have serious implications for key sectors and the economy at large.”

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Economic Perspective articles:

 

Back issues

April 2019: volume 43, number 1

Brexit uncertainties masking longer term challenges to the Scottish economy

17 April 2019

The decision to extend the deadline for the UK's withdrawal from the EU has provided some welcome temporary respite from recent months of heightened economic uncertainty, but only for a short while with the range of scenarios as wide as ever, says the Fraser of Allander Institute.

In its latest Economic Commentary, supported by Deloitte, the University of Strathclyde-based research institute also argues that with Brexit dominating the headlines, important questions about the future longer-term trajectory of the Scottish economy are being crowded out.

Today's report lays out different scenarios for growth in Scotland over the next few years. These include scenarios ranging from a disorderly exit from the EU, in which case Scotland is likely to enter recession, to a scenario where confidence returns, unlocking business investment and boosting the economy to nearer trend growth.

The Institute’s central forecast, based on an orderly departure at some point in 2019, predicts growth of 1.1% in 2019 and 1.4% and 1.5% for 2020 and 2021.

The report shows that economic growth has remained steady over the course of 2018, with growth being fairly broad based, employment at a near record high and unemployment at a record low.

However, critically, earnings and productivity growth remain weak which present challenges for Scotland's long-term growth prospects.

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Economic Perspective articles:

December 2018: volume 42, number 4

A smooth Brexit transition crucial for Scotland’s economy

The Scottish economic growth in 2018 is on track to be at its highest rate since 2014, according to the latest economic commentary.  The Institute predicts growth of 1.4% in 2019, 1.5% in 2020 and 1.4% in 2021 – presuming the UK secures smooth transition from the EU.

A disorderly Brexit remains the biggest threat to Scottish jobs and growth.  The Bank of England have set out a ‘worst-case’ scenario which could see the UK economy shrink by around 8% from 2019.

To put that in context, this would be around double the size of the recession Scotland witnessed during the financial crisis, and would be equivalent to an extra 100,000 people unemployed in Scotland.

Economic Perspective articles:

September 2018: Volume 42, number 3
 

Upturn in Scottish economic growth but a smooth Brexit transition is vital to avoid derailing progress

Securing a smooth Brexit transition is 'vital' to protect Scotland's growing economy – even if that means extending the Article 50 negotiation period.
In the latest Economic Commentary,  Scottish GDP grew by 0.5% in the second quarter of 2018. This is in line with its prediction of a more optimistic outlook for 2018 and is the second quarter in a row Scotland has outpaced UK growth.
Despite these positive figures we emphasize the continuing fragility of the Scottish economy and stress the importance to the UK economy of securing an orderly transition upon leaving the EU in March 2019 to avoid potentially damaging disruption to business.

Economic Perspective individual sections:

Monetary and fiscal policy in a newly independent Scotland 

Highlighting the need for policy coordination 

Reappraising Scotland’s exports and their geographies 

June 2018: Volume 42, number 2 March 2018: Volume 42, number 1 December 2017: Volume 41, number 4 September 2017: Volume 41, number 3 June 2017: Volume 41, number 2 March 2017: Volume 41, number 1 December 2016: Volume 40, number 3 July 2016: Volume 41, number 2 June 2016: Volume 40, number 1 March 2016: Volume 39, number 3 November 2015: Volume 39, number 2 June 2015: Volume 39, number 1 March 2015: Volume 38, number 3 November 2014: Volume 38, number 2 June 2014: Volume 38, number 1 March 2014: Volume 37, number 3 2013 2012 2011 2010 2009 1975 - 2008 Special issues

Latest Fraser of Allander Commentary

April 2019: volume 43, number 1

Brexit uncertainties masking longer term challenges to the Scottish economy

17 April 2019

The decision to extend the deadline for the UK's withdrawal from the EU has provided some welcome temporary respite from recent months of heightened economic uncertainty, but only for a short while with the range of scenarios as wide as ever, says the Fraser of Allander Institute.

In its latest Economic Commentary, supported by Deloitte, the University of Strathclyde-based research institute also argues that with Brexit dominating the headlines, important questions about the future longer-term trajectory of the Scottish economy are being crowded out.

Today's report lays out different scenarios for growth in Scotland over the next few years. These include scenarios ranging from a disorderly exit from the EU, in which case Scotland is likely to enter recession, to a scenario where confidence returns, unlocking business investment and boosting the economy to nearer trend growth.

The Institute’s central forecast, based on an orderly departure at some point in 2019, predicts growth of 1.1% in 2019 and 1.4% and 1.5% for 2020 and 2021.

The report shows that economic growth has remained steady over the course of 2018, with growth being fairly broad based, employment at a near record high and unemployment at a record low.

However, critically, earnings and productivity growth remain weak which present challenges for Scotland's long-term growth prospects.

Read the latest commentary

Economic Perspective articles:

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