Scotland’s growth outpaced by UK in first quarter – Daily Business

Scotland’s economy grew in the first quarter of 2025 but at a slower rate than the UK overall, according to Scottish government data.

For the January to March period, Scotland’s GDP expanded by 0.4% in real terms following growth of 0.1% in Quarter 4. Over Quarter 1, GDP for the UK as a whole grew by 0.7%.

Output in the services sector grew by 0.5% and in production by 0.3%, while construction remained flat (0.0%). Output in agriculture, forestry and fishing contracted by 0.4%.

However, there was a 0.2% decrease in onshore GDP for March, following a similar fall in February, raising concerns about April’s data which will include the first response to the Budget tax rises.

Deputy First Minister Kate Forbes said: “It is encouraging to see quarterly growth continuing and getting stronger in Scotland – following a 0.1% rise at the end of 2024.

“In the face of ongoing global challenges dynamic steps are being taken to grow and transform Scotland’s economy.  

“We are pursuing new investment, building export potential and supporting innovation. Last week the First Minister announced that US green aircraft engine developer ZeroAvia is to establish a new manufacturing base in Scotland, creating around 350 jobs.

“Meanwhile, our Programme for Government includes a Six Point Export Plan to help businesses tap into new markets and increase sales.”

Scotland Office Minister Kirsty McNeill said: “Our Plan for Change is working by kickstarting economic growth and putting more money in people’s pockets by Getting Britain Working – there’s been an annual pay rise of around £1400 for up to 220,000 Scottish workers and an end to zero-hours contracts for nearly 80,000 Scots thanks to our ground-breaking Employment Rights Bill.

“Scotland’s growth must not lag behind the rest of the UK and it is absolutely essential that both governments work together to deliver better jobs, wages and opportunities for the people of Scotland.

“The UK Government ended austerity in Scotland with a record £50 billion block grant in 25/26 for the Scottish Government to spend on public services.

“Meanwhile, our Brand Scotland trade missions are promoting Scotland’s goods and services on the world stage to encourage further growth and investment and our forthcoming Industrial and Trade Strategies will create opportunities for people right across the UK.”

Kevin Brown, savings specialist at Scottish Friendly, said: “March’s GDP figures show Scotland trailing the wider UK, which is disappointing but not disastrous, and certainly isn’t a signal to panic.

“The gap between Scotland and the UK isn’t huge, and with the right conditions – stable inflation, improved consumer confidence, and no escalation in global trade tensions – growth could quickly pick up.

“On a more positive note, the domestic picture looks to be improving. Inflation did spike in April, mainly due to higher utility bills, but the worst of that pressure should ease later in the year. The recent rate cut has also taken some strain off borrowers, even if it came at the expense of savers.

“Worries over a potential trade war have eased, which is good news for key Scottish exports such as whisky and salmon, but they haven’t disappeared entirely.

“A fresh flare-up in global tensions would hit both Scotland and the UK hard, meaning that the near-term outlook remains clouded by uncertainty.”