SCOTLAND is officially in recession after economic output fell for two successive quarters, figures confirmed today.from the Scotland's For Peace group have delivered an alternative Budget to the Edinburgh office of Chancellor Alistair Darling, which does not include funding for the Trident nuclear submarine system.
The country's gross domestic product (GDP) fell by 1.7 per cent in the final quarter of 2008, the figures showed.
The fall came after Scotland's GDP fell by 0.8 per cent in the previous quarter.
Today's figures show Scotland's economy fared sli
ghtly worse than the UK's in the final quarter of last year.
The decline of 1.7 per cent compares with a fall of 1.6 per cent for the UK as a whole in that quarter.
Today's figures came as no surprise as the UK as a whole was officially confirmed as being in recession in January.
Scotland's figures are published three months after the UK's.
On today's figures, Scotland's GDP rose by 0.5 per cent over the whole of 2008, compared with a UK increase of 0.7 per cent.
Scotland's service sector grew by 1 per cent over the year, compared to 1.5 per cent growth for the UK service sector.
But in the final quarter of the year Scotland's service sector fell by 0.8 per cent, the same as the UK's figure, and the production sector fell by 4.7 per cent, slightly more than the UK figure of 4.5 per cent.
The construction industry fell by 4.7 per cent in Scotland and 4.9 per cent for the UK as a whole during the final quarter.
But Scotland's financial services sector grew by 2.2 per cent – and there was "modest growth" in the public administration, education and health sector, which saw a rise of 0.5 per cent.
Finance Secretary John Swinney said: "These figures highlight the scale of the challenge we all face and mean that Scotland is now officially in recession.
"Although our labour market remains substantially stronger than the UK as whole, further figures published today show unemployment is rising."
Action being taken by the Scottish Government through its economic recovery programme was supporting thousands of jobs, he said.
"What is absolutely clear, however, is that we cannot allow public spending cuts to jeopardise Scotland's economic recovery," said Mr Swinney.
"As a Government we have urged the Chancellor to rethink planned cuts of £1 billion in the spending available to Scotland in the two years from 2010."
CBI Scotland assistant director David Lonsdale said the economy has worsened since the period covered by today's figures.
"With the wider UK economy firmly in the doldrums, the likelihood is that Scotland's economy won't perk up until well into next year," he said.
"Action to ease the difficulties firms face in terms of cash flow is a must, by reversing the rise in small firms' corporation tax, ensuring all public bodies settle supplier invoices within the target 10 days, and by early implementation of the proposed partial deferment of this year's bumper rise in business rates."
