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Scotland frets over oil, but posts economic gains

Nation's economy posts nearly three straight years of uninterrupted growth.

By Daniel J. Graeber
Scottish government boasts of steady economic growth, but expresses concerns about external factors like the low price of crude oil. File Photo by UPI/Maryam Rahmanian
Scottish government boasts of steady economic growth, but expresses concerns about external factors like the low price of crude oil. File Photo by UPI/Maryam Rahmanian | License Photo

EDINBURGH, Scotland, Aug. 21 (UPI) -- The Scottish government said Friday it was on a streak of slow but steady economic growth, but cautioned risks remain from low oil prices and a weak Asia.

Scotland reported growth of 0.6 percent during the first quarter of the year, which it said signaled one of the longest continuous streaks of growth since 2001.

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"Today's State of the Economy report shows almost three years of uninterrupted growth," Deputy First Minister John Swinney said in a statement. "The most recent figures for this year show all main sectors of the economy recorded growth."

Though fiscal year 2016, the government said it expects to see $7 billion in new infrastructure investment. Despite the mid-term growth expectations, the government said low oil prices may be a benefit in some economic sectors, but adds uncertainty to operations in the North Sea.

Brent crude oil prices, a global benchmark based on North Sea blends, was trading below the $47 per barrel mark early Friday. At $60 per barrel, energy consultant group Wood Mackenzie said about 85 percent of new regional offshore developments are at risk of delays.

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The Scottish economic report said low crude oil prices and slow economic growth in Asian economies could throttle future growth.

"Although Scotland has not been immune to the global economic challenges over the last few years and there is undoubtedly still work to be done, these figures show our economy's underlying resilience," Swinney said.

The government said that, while low crude oil prices leaves its energy sector depressed, overall production from North Sea basins is expected to increase by more than 15 percent by 2019.

Scottish First Minister Nicola Sturgeon returned from a five-day trade mission to China in early August with partnerships worth an estimated $85 million. Sturgeon said she held discussions with three major, but unnamed, Chinese oil companies about North Sea work during her overseas visit.

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