Scottish Secretary reacts to May 2023 GDP figures

27 Jul 2023 12:04 PM

Alister Jack says despite factors affecting growth, the UK Government is prioritising halving inflation, growing the economy and reducing debt

The monthly figures for Scotland’s onshore GDP yesterday published here for May 2023 and show a fall of 0.2% This comes following a contraction of 0.5% in April, unrevised from the previous publication.

The final figures for the first three months of 2023 have also been confirmed here, and show growth of 0.2%, revised down slightly from the estimate of 0.4% released at the end of May.

Scottish Secretary Alister Jack yesterday said:

We are still facing economic headwinds – and an extra bank holiday had an impact on growth in May – but despite that, the economy has still broadly performed more strongly than expected in recent months, aided by resilience in the job market and falling global energy prices.

While inflation is falling and stands at its lowest level since last March, we aren’t complacent and know that high prices are still a huge worry for families. That’s why we’re sticking to our plan to halve inflation this year, as well as reducing debt and growing the economy.

We’re also providing vital financial support for businesses and families and, by 2024, we will have spent £7 billion helping to ease the burden of energy bills in Scotland including £2.1 billion in targeted cost of living payments. We’re also boosting trade and encouraging investment with more than £2.2 billion ploughed directly into promoting prosperity in Scotland which will benefit the whole of the UK.

Background

• The UK was the fastest growing economy in the G7 last year. Since 2010, the UK has grown faster than Japan, France, and Italy, and at about the same rate as Germany.
• The IMF is predicting that around 90% of advanced economies will see a decline in growth in 2023.
• A contraction in the economy in May was anticipated because of the extra bank holiday that month.
• Data from the ONS shows that June CPI fell from 8.7% to 7.9%, below market expectations. Core CPI also fell to 6.9% from 7.1.
• At Autumn Statement 2022, the government took difficult, but necessary, decisions across taxation and spending to restore economic stability.
• The OBR have said that the measures in the Budget caused them to revise potential output upwards by the largest amount ever in their forecasts.
• The government is maintaining record levels of capital investment - £600bn over the next 5 years – including investment in critical infrastructure like Northern Powerhouse Rail, HS2 and Sizewell C, and safeguarding the highest ever R&D budget.