An economic commentator has cited the “eurozone crisis” as being a major factor in Scotland’s continuing economy woes, as it downgraded the country’s growth forecast for the year.
Earlier in the year, the Scottish Item Club had predicted that the Scottish economy would grow by 1.1% throughout 2012. However, in its summer update, the forecaster said growth is now predicted to be just 0.3%.
In further bad news for Scottish business, this falls short of the 0.4% growth in 2011. The forecast for 2013 remains at 1.1% growth.
In its report, the Ernst & Young Sponsored forecaster said that the narrow export base and the ongoing issues facing Europe were damaging any potential.
Speaking about the report, the Scottish Item Club’s Dougie Adams, said:
“The eurozone crisis is the most pressing risk to the Scottish economy.”
The report did go on to say that recent success in the whisky export industry had been “a boon” however.
Many companies in the sector have seen fantastic growth, with many seeking help from factoring companies in Scotland to help them drive forward.
A lack of home investment in general though is contributing to the stagnating economy.
Many companies are simply sitting on their cash, waiting to see what happens in Europe.
The effect will be to see the economy stagnate further, which, added to continuing cuts in the public sector, could exacerbate the issue. As a result, many are calling on Westminster to take action to improve access to finance and investment in Scotland and the whole of the UK.