This follows a 0.1% contraction in March 2023 (revised down from a 0.0% change). Output is above the pre-pandemic level of February 2020, by 0.7%.

Kevin Brown, savings specialist at Scottish Friendly, commented: “Scotland’s GDP fell by 0.5% in April and follows a 0.1% contraction in March.

“This is a worrying trend beginning to show as it stands in contrast to overall figures which suggest the rest of the UK is still growing. Scotland’s economy is still smaller than its pre-pandemic size too.”

In the three months to April, GDP is estimated to have grown by 0.2% compared to the previous three month period.

Output in the services sector, which accounts for around three quarters of the economy, contracted by 0.6% in April. At the broad level, output in consumer facing services grew by 0.2%, while health, education and public services output contracted by 0.3%, and output in all other services contracted by 1.0%.

Kevin Brown

Mr Brown added: “An economic contraction for Scots is worrying at a moment of high pressure from the twin forces of stubbornly sticky inflation and rising interest rates. While the labour market is looking resilient still, if GDP is beginning to contract then news of rising unemployment could soon follow.

“The biggest contributor to the fall came from services, down 0.6%, which make up around three quarters of the Scottish economy. This is also the area of the most persistent inflation for the whole UK, suggesting something might be beginning to turn for the Scottish economy.

“With the Monetary Policy Committee taking a harsher line on interest rates for the whole UK, Scotland could be in the firing line for a bigger hit if this GDP decline persists. While we’re still some way off a recession in Scotland, the numbers are all going in the wrong direction for the economy.”