Why Scotland must be bold – Steve Cardownie

The coronavirus recession requires the Scottish Government to take bold and confident measures to stimulate the economy, writes Steve Cardownie.

Construction work is starting up again (Picture: PA)

The Fraser of Allander Institute has estimated that the Scottish economy will have contracted by about 19.2 per cent during the second quarter of 2020, with “new data indicating that activity remains a fraction of what it was prior to the start of the Covid-19 crisis”.

The think tank also states: “Some sectors have started tentatively to re-emerge from the temporary shutdown, most notably in some areas of manufacturing and construction but for many parts of the economy activity has changed very little or in some cases fell further.”

The Institute goes further, warning that “it is only when the economy starts to emerge from the lockdown that the full long-term impacts of the crisis will be realised. So, whilst official data like GDP may ‘start to recover’ the economic crisis we face is only just the beginning and the recovery for many businesses and individuals is a long way off”.

The data on jobs indicates just how great the challenge will be: if only 20 per cent of those currently on furlough lose their jobs then the unemployment rate would double.

A clearer picture of the scale of the recession and the potential implications for the Scottish economy in the long term will only be emerging in a year or so.

The forthcoming recession’s effects will be difficult to mitigate but the Scottish Government will have to be bold and confident about the measures it will have to introduce to stimulate and boost the economy – no-one said it was easy.

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