The Scottish economy has been dominated by Brexit uncertainty in recent years, contributing to growth being “significantly below trend”, a Government report said.
The 23-page publication, released by the Scottish Government’s chief economist Dr Gary Gillespie, said the UK’s departure from the EU had hit businesses and affected economic growth.
Prime Minister Boris Johnson – buoyed by a majority won in the House of Commons in December – pushed ahead with Brexit on January 31 despite all of the devolved administrations withholding consent for it.
According to Mr Gillespie’s report, growth is expected to continue to be sluggish over this year as the future relationship with the EU remains undecided.
The Scottish Fiscal Commission, following the announcement of the draft Budget at Holyrood last week, forecast 1% growth in 2020 and 1.1% growth in 2021.
Growth in 2019 had been forecast at 1.2%, however the economy actually grew by 0.9%.
The report said: “The official and independent forecasts for the Scottish economy suggest growth of around 1% in 2020, rising slightly over the next few years, which is broadly in line with recent annual growth in productivity.
“As noted, this may be stronger than 2019 but is likely to remain below trend as the economy transitions to whatever new trade arrangements materialise for 2021 and beyond.”
Public finance minister Kate Forbes said: “We were clear from the outset that Brexit would damage our economy and that the best option for the future wellbeing and prosperity of Scotland was to stay in the European Union.
“As the First Minister said this week, we are leaving the EU at a time when we have never benefited from it more, and when we have never needed it more to achieve our ambitions.
“Trade agreements shape the nature of our economy and the situation we are in presents a particular challenge to exporters as we are taken out of the world’s biggest single market, which is around eight times bigger than the UK market.
“As a responsible Government we will continue to take steps to protect jobs and our economy from further damage caused by Brexit, but not every impact can be mitigated.
“We believe the best option for Scotland is to become an independent country within the European Union. Whatever our constitutional future, Scotland will remain an outward facing, constructive nation, working closely with our European partners.”