This follows a 0.8% contraction in December 2022 - revised down from a 0.6% contraction. Output remains above the pre-pandemic level of February 2020, by 1.1%.

In the three months to January, GDP is estimated to have grown by 0.1% compared to the previous three month period. This is the same rate as 2022 Quarter 4, October to December 2022.

Output in the services sector, which accounts for around three quarters of the economy, increased by 0.5% in January. At the broad level, output in consumer facing services contracted by 2.2%, while health, education and public services output increased by 0.8%, and output in all other services increased by 1.8%.

Tracy Black, director, CBI Scotland, said: “An uplift in Scottish GDP in January can’t mask the ongoing challenges facing the economy.

“Underlying economic momentum is still poor, and, despite recent falls in energy prices, the cost of living remains high. Firms are paying for higher costs for goods and employee wages.

“The new First Minister and Finance Secretary must prioritise growth and work with the UK government to tackle labour and skills shortages, cut red tape to attract investment and improve Scotland’s digital connectivity and transport network.”