Outlook and appraisal [February 2012]

The basic picture continues to be one of weak recovery with a further weakening apparent towards the end of 2011, as the UK economy contracted by 0.2%. Scottish GDP is still -3.3%% below the pre-recession peak nearly four years ago, while the figure for UK GVA is -3.6%. However, while the depth of the recession was greater in the UK, at -7.2%, than in Scotland, -5.9%, the recovery of UK GDP has been slightly faster than in Scotland. The National Institute in London has noted that the time taken in returning to the pre-recession peak is now greater than in the Great Depression in the 1930s. Our new forecast suggests that overall Scottish GDP will not return to its pre-recession peak - the level of GDP the economy was at just before it went into recession - until the third quarter of 2014, just in time for the Commonwealth Games in Glasgow (23rd July to 3rd August 2014). That is, six years after the recession began.