The chief economist at Holyrood has said that the country could return to levels seen before the recession as early as 2014 – resulting in a faster recovery than the rest of the UK.
The news, in the latest State of the Economy report from Dr Gary Gillespie, comes despite the business world in Scotland still facing severe challenges.
The continuing woes in the Eurozone and problems accessing lending continue to affect some businesses.
However, with invoice discounting and factoring and exports on the increase, there are also many success stories.
While the report does recognise the fragility of the overall situation, it does go on to suggest that despite this, recovery could be just around the corner. The report says:
“Assuming a gradual resolution to the euro crisis coupled with a continued period of de-leveraging, we expect growth to be fragile through 2012, before picking up somewhat in 2013 and returning to near trend in 2014.
“This would suggest that output will return to pre-recession levels at some point during 2014.”
The reasons why a recovery could be ahead of the rest of the UK are many, according to Gillespie. Most notoably, the economic adviser said Scotland’s lower housing costs and the country’s higher saving rates in the last decade puts the country on a firmer footing.
The report does not predict what could happen should the Eurozone crisis deepen, or banking issues continue. However, Gillespie does say that such factors were considered in the compilation of the report.