Economic Commentary [April 2026]

Scotland’s economy is navigating the first half of 2026 with a degree of cautious momentum. Recent data points to activity picking up, with output edging higher and resilience holding in the face of sustained uncertainty. This quarter’s Commentary shows that Scotland’s GDP expanded by 0.14% in the final quarter of 2025, slightly ahead of the rest of the UK on 0.1%, and more recent figures point to a surprisingly strong monthly increase at the start of this year. While these movements are modest, they suggest the economy is proving steadier than many expected.

However, that steadiness should not be overstated. Growth remains limited in scale, the wider context is unsettled and rising oil and energy prices, alongside continued geopolitical instability, present clear headwinds. The global environment continues to shift in ways that are difficult to predict, and Scotland is not insulated from those forces. The task ahead will be to build on early signs of progress while recognising how easily momentum could falter.

Set against this backdrop, understanding the current state of our public services is essential. Findings from Deloitte’s most recent State of the State report, which provides a view of the public sector from the people who both use it and run it, highlighted the extent of the pressures facing Scotland’s government and public services. Fiscal constraints are tightening, with increasing demand on public services and limited flexibility for new commitments. Delivery challenges also persist, including skills shortages, legacy systems and the pace at which policy can be translated into tangible outcomes.

Business sentiment also reflects this uncertain environment. Deloitte’s latest CFO Survey, which gauges sentiment and balance-sheet strategies among the UK’s largest businesses, pointed to weakening confidence among finance leaders, with geopolitical risk now a primary concern. Scottish firms are navigating these pressures alongside domestic uncertainty, with both global conditions and local policy shaping investment and hiring decisions.

Despite these constraints, Scotland’s underlying strengths remain clear: strong academic institutions, a skilled workforce and abundant energy and natural resources. The issue, then, is less about identifying opportunity and more about how consistently it can be realised. The questions are less about identifying opportunity and more about how quickly and consistently it can be realised.