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Purpose Target: Economic Growth

 To raise the GDP growth rate to the UK level

Current Status

When rounded to one decimal place, at 2017Q2 annual GDP growth in Scotland was 1.5 percentage points lower than in the UK. At 2017Q1, annual GDP growth in Scotland was 1.5 percentage points lower than in the UK. Between 2017Q1 and 2017Q2, the gap between annual Scottish and UK GDP growth remained stable (0.0% change when rounded to one decimal place).

Last Update: 10 October 2017
Next Update: January 2018

down To match the GDP growth rate of the small independent EU countries by 2017

Current Status

At 2017Q2 annual GDP growth in Scotland was 2.6 percentage points lower than in the Small EU Countries. At 2017Q1, annual GDP growth in Scotland was 2.4 percentage points lower than in the Small EU Countries. Between 2017Q1 and 2017Q2 the gap between annual Scottish and Small EU GDP growth rates increased by 0.2 percentage points in favour of small EU.

Last Update: 25 October 2017
Next Update: January 2018

Economic Growth

Why is this Purpose Target important?
What will influence this Purpose Target?
What is the Government's role?
How is Scotland performing?
Criteria for recent change

Further Information

Why is this Purpose Target important?

Increasing sustainable economic growth is important if we are to create a more successful country, with opportunities for all of Scotland to flourish. It will help to:

  • Counter the effects of the recession
  • Create greater and more widely shared employment opportunities
  • Promote the transition to a low carbon economy
  • Tackle key health and social problems
  • Reduce crime and anti-social behaviour
  • Foster a climate of entrepreneurialism, international trade and innovation
  • Share the benefits of growth across all of Scotland's communities
  • Stimulate a virtuous cycle of re-investment in Scotland's public services
  • Bring a culture of confidence, creativity and personal empowerment to Scotland
  • Secure a high quality environment and a sustainable legacy

What will influence this Purpose Target?

The Purpose framework identifies the three key components of faster sustainable economic growth:

  • Productivity, Competitiveness and Resource Efficiency
  • Participation in the labour market
  • Population Growth

It also identifies our desired characteristics of growth - Solidarity, Cohesion, and Sustainability - which are themselves important drivers of sustainable economic growth. Improving the social, health, environmental and economic opportunities for all of Scotland will be key if we are to maximise the nations economic potential.

The Government Economic Strategy sets out how we are making the full use of the economic levers currently devolved to the Scottish Parliament, in order to improve Scotland's sustainable economic growth rate. However, many of the key job creating powers - particularly in relation to taxation and key elements of economic policy - lie outwith the remit of the Scottish Government.

What is the Government's role?

The Government has a vital role in supporting recovery in the economy and in providing the overarching economic framework which is conducive to sustained economic growth in the private sector. The Government Economic Strategy focuses our actions on six Strategic Priorities, which will accelerate recovery, drive sustainable growth and develop a more resilient and adaptable economy:

How is Scotland performing?

For UK Target:

The latest data show that over the year to 2017Q2, GDP in Scotland increased by 0.4% while the UK increased by 1.8% (measured on a rolling four quarter on four quarter basis). When rounded to one decimal place, this resulted in a gap of 1.5 percentage points in favour of the UK. This compares to an annual increase in GDP to 2017Q1 of 0.3% in Scotland and 1.9% in the UK - resulting in a 1.5 percentage point gap in favour of the UK (0.0% change when rounded to one decimal place).

Therefore between 2017Q1 and 2017Q2 the gap between annual GDP growth rates in Scotland and the UK remained stable (when rounded to one decimal place).

Annual Gross Domestic Product (GDP) growth rates for Scotland and the UK for the purposes of measuring progress against this indicator are published on a rolling four quarter on four quarters basis. The quarterly Scottish GDP publication for 2017Q2 presents annual growth rates calculated by comparing the latest quarter with the same quarter of the previous year. As a result, the Scottish and UK annual GDP growth rates published on Scotland Performs may not be the same as that published in the official Scottish Government GDP Quarterly release.

UK GDP graph

UK GDP graph 2

 

Source: Scottish Government, ONS
The data for this chart is available at the bottom of the page.

For Small EU Countries Target:

The latest data show that over the year to 2017Q2 GDP in Scotland grew by 0.4% whilst GDP growth in the Small EU was 3.0% (measured on a rolling four quarter on four quarter basis). When rounded to one decimal place, this resulted in a gap of 2.6 percentage points in favour of Small EU. This compares to an annual increase in GDP to 2017Q1 of 0.3% in Scotland, and an increase of 2.7% in the Small EU - resulting in a 2.4 percentage point gap in favour of Small EU (when rounded to one decimal place).

Therefore, between 2017Q1 and 2017Q2, the gap in annual GDP growth between Scotland and the Small EU countries increased by 0.2 percentage points in favour of Small EU (when using unrounded data).

The small independent EU countries are defined as: Austria, Denmark, Finland, Ireland, Luxembourg, Portugal and Sweden. As with Scotland and the UK, annual Gross Domestic Product (GDP) growth rates for the Small EU Countries, for the purpose of measuring progress against this indicator, are calculated on a rolling four quarters on four quarters basis and therefore the annual Scottish GDP growth rate published on Scotland Performs may differ from that published in the official Scottish Government GDP quarterly release.

The average growth in small independent EU countries has been strongly affected by large and irregular growth rates recorded by Ireland. In 2015 Q1 Ireland recorded growth of 21.4%. This is the highest quarterly growth rate recorded for any country in the OECD database which dates back to 1960. Since then, Ireland’s GDP growth rate has been volatile and has regularly been several times higher or lower than the other independent EU countries. To illustrate the impact that Ireland’s GDP has on the average growth in small independent EU countries, additional figures showing the Small EU countries excluding Ireland are available in the downloadable Economic Growth data at the end of this page.

2003 Q1 to 2017 Q2

2003 Q1 to 2017 Q2

Source: Scottish Government, OECD
The data for this chart is available at the bottom of the page.

Criteria for recent change

This evaluation is based on: any difference in the gap in annual growth rates within +/- 0.1 percentage points of the last quarter's figure suggests that the position is more likely to be maintaining than showing any change. A movement of 0.1 percentage points or more in Scotland's favour suggests that the position is improving, whereas a movement of 0.1 percentage points or more in the UK or Small EU's favour suggests that the position is worsening.

Further Information

For information on general methodological approach, please click here.

Scotland Performs Technical Note

Statistics Topic Page

View Purpose Target Data

Downloadable document:

Title:Economic Growth
Description:Economic Growth
File:Economic Growth [XLSX, 49.2 kb: 24 Oct 2017]
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