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Swinney upbeat on economic prospects
25/02/2010
Continued stimulus measures and tapping into the potential of new industries is key to returning to strong economic growth, John Swinney said today.
In a major lecture on the state of Scotland's economy, the Cabinet Secretary for Finance and Sustainable Growth will set out his views on how skills, innovation and the industries of tomorrow can ensure Scotland maintains a competitive advantage as conditions improve.
Mr Swinney said:
"No nation has been immune from turbulence in the global economy over the past two years, with the impact of recession being felt right across Scotland. The Scottish Government was absolutely right to act with practical measures through our Economic Recovery Plan to help Scotland withstand the immediate pressures of recession.
"Recent developments in the economy have suggested that Scotland is close to emerging from recession, with the pick-up in global demand benefiting Scottish exports and growth in retail sales. But there is absolutely no room for complacency as we move forward.
"That's why we have called on further targeted stimulus from the UK Government, and in particularly for consent to bring forward further capital expenditure into 2010-11 to support the Scottish economy. There is a significant risk that the premature withdrawal of fiscal stimulus measures may result in a 'double-dip recession'. The head of the International Monetary Fund has already cautioned that reducing public sector support before private sector demand has sufficiently recovered could result in economies falling back into recession.
"Furthermore, for Scotland to achieve its full economic potential, it must have greater access to the economic levers of an independent country. This would not only enable us to better support the Scottish economy in times of uncertainty through targeted policies which best reflect our distinct needs and challenges, but also allow us to put in place policies which help to deliver sustainable economic growth when conditions are more sustainable.
"Central to Scotland's success in the longer term will be the positioning of our economy within a growing and more diverse global marketplace. There are three clear areas of opportunity for Scotland which give me cause for optimism. The growth of new markets and international trade, the importance of innovation and the development of our key sectors, and the movement toward a low carbon economy.
"For example, Scotland hosts one of the most sizeable life sciences clusters in Europe, and is internationally renowned for biotech excellence. With a workforce of over 32,000 highly skilled people, and an annual turnover of three billion pounds, the sector makes a tremendously important contribution to our economy and we must continue to look for ways of extending our competitive advantage.
"And, as we seek to emerge from recession, we have the opportunity to develop new, low carbon products and services to accelerate recovery in the short term and drive long-term sustainable economic growth. Scotland has the most ambitious emissions reductions targets in the world and we are working to become the clean, green energy hub of Europe - a real area of strength for our economy.
"Strengthening our competitive advantage is the only way the Scottish economy will prosper in what is likely to be a period of substantial change, as the global economy moves forward."