The Scottish economy [May 2001]

Given the slowdown in the world economy and the problems of the US technology sector recent world events (see World economy section) forecasting the Scottish economy is more difficult than usual. Asjn our January Commentary we believe the effects of the US slowdown on the Scottish economy will be relatively benign, however, there are clear problems in the short-run. Scottish consumption, general government expenditure, exports to the UK and investment are the main drivers of the economy over the forecast period, although we do expect that there will be a significant reduction in investment in 2002. We are concerned about Scotland's exports outside the UK in 2001 and tourism is also expected to perform poorly over 2001-2002.