20 December 2023

As we stand at the threshold of a new year, it's opportune to reflect on the significant developments that have shaped Scotland's economic policy in 2023. Join us as we delve into the four key facets that have influenced Scotland's economic trajectory over the past year.

 

1. GDP Growth Forecast and the Scottish Fiscal Commission's Insight

Despite a positive but subdued GDP growth forecast of 0.2% for 2023, as projected by the Scottish Fiscal Commission, the year has been marked by the challenging dynamics of economic growth.

 

2. Subdued Economic Growth and Real GVA Projections

According to the latest PwC UK Economic Outlook, the Scottish economy is expected to experience subdued growth, with real Gross Value Added (GVA) anticipated to increase by only 0.3% in 2023 compared to the previous year. These projections underscore the complexities faced in the economic landscape.

 

3. Global Economic Trends and Their Local Impact

Global economic trends have cast their shadows on Scotland, with business activity slowing or contracting across major economies. As of Q3 2023, the UK economy grew by a mere 0.2%, reflecting a broader trend of economic challenges that have reverberated locally.

 

4. Scottish Budget, Public Finances, and Social Security Spending

A significant aspect of Scotland's economic landscape lies in the realm of public finances. The Scottish Fiscal Commission estimates a notable increase in devolved social security spending, from £4.2 billion in 2022-23 to £5.2 billion in 2023-24. Moreover, the GDP is not expected to rebound to pre-pandemic levels until well into 2025.

As we bid farewell to 2023, it's clear that Scotland's economic landscape has been marked by a mix of challenges and strategic initiatives. Navigating uncertainties with resilience remains key.

 A Heartfelt Thank You and Season's Greetings

On behalf of Money Advice Scotland, I would like to extend our sincere gratitude to each of you for your readership. Your engagement and interest in these explorations and discussions are what make this community vibrant and insightful.

Our team will be taking a well-deserved break from December 22nd until January 3rd. I look forward to reconnecting via the policy blog on January 10th, with more