The Scottish government has hit back at criticism from a leading Scottish economist who has questioned the accuracy of an exceptionally low official estimate of economic growth in the Scottish economy of just 0.1 per cent between April and June this year.
In his most recent monthly report on the Scottish economy published last week, Inverness-based economist Tony Mackay said that, following twelve quarters of relatively strong growth in which Scotland outperformed the rest of the UK and following growth of 0.4 per cent in the first quarter of this year, the Scottish government’s official estimate of 0.1 per cent for the second quarter of 2015 was “unbelievably low”.
According to Mackay’s own estimate, the Scottish economy grew 0.6 per cent during the second quarter, only slightly below the UK growth estimate for the same period of 0.7 per cent.
The Scottish Government responded on Friday by saying that it stood by its estimate which had been “independently assessed as being produced according to sound methods.”
A spokesperson for the government said: “The statistics use compilation methods which are comparable with the approach taken by the Office for National Statistics (ONS) for the UK, and use data from thousands of firms every quarter, including near universal coverage of every large business operating in Scotland.”
The government puts the low forecast for the second quarter down to flat growth in the services sector, which accounts for nearly three quarters of the Scottish economy, a contraction of 0.8 per cent in the production sector and growth of 3.8 per cent in construction.
If the government estimate turns out to be correct (and growth estimates are frequently revised upwards and downwards several times) it would take the annual growth rate for Scotland down from a government forecast of 2.3 per cent four months ago (and 2.7 per cent in a forecast published last year) to just 1.9 per cent. It would also be equivalent to annual growth of 0.4 per cent over four quarters.
But the Scottish Government’s insistence that its figures are correct has left Mackay unmoved. “I feel very strongly that this estimate is wrong and there has probably been some mistake with the sampling figures,” he told the Sunday Herald.
Mackay points to unemployment figures for Scotland which have fallen steadily over the last year, including during the second quarter of this year as further evidence to support his growth estimate.
“The same is true of most of the other short-term indicators such as airport passenger numbers, new car sales and the Bank of Scotland’s PMI index,” he said.
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