Forecasts of the Scottish economy [October 2003]

There has been robust signs of a strengthening of the global economy particularly in the US and Asia. Confidence and equity markets have also rallied although output and employment data remains disappointing. The Euro Area has stagnated with recession in Germany, the Netherlands and Italy but France is slightly ahead of its counterparts. The US remains the world's leading economy but perhaps we rely too heavily on the US to turnaround the world economy. Japan has performed better than expected but is not growing at the same pace as its neighbours. There are clear downside risks to the economy, probably the most important being how the growing US deficit is corrected. Trade is expected to improve significantly in 2004.