"These impacts have the potential to push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008."
The paper sets out two potential no-deal scenarios, one of which would see short term disruption to supply chains lasting for a number of months, with the second scenario looking at an extended period of disruption.
Potential impacts to the economy of these two scenarios include Scotland's trade with the EU being 'significantly impaired', with a potential drop in Scottish exports by 10%-20%.
It also predicts that business investment could fall by £1bn in 2019 and a fall in exports and overseas investment could result in a 10%-30% depreciation in sterling.
As a result, the report expects to see a rise in unemployment and a drop in net migration into Scotland.
The report concludes that collectively, these pressures could push the Scottish economy into recession during 2019, with the potential for GDP to contract by between 2.5%-7%.
Previous research from the Scottish Government shows that the UK Government’s proposed Brexit deal could see a 6% fall in GDP by 2030, worth over £1,600 per person in Scotland.
Economy Secretary Derek Mackay said: “This paper confirms that all forms of Brexit will harm Scotland’s economy and result in lower household incomes.
“People in Scotland voted overwhelmingly to stay in the EU but our interests are being ignored by a UK Government that wants to take Scotland out of the European Single Market, which is eight times the size of the UK alone.
“However, the economic harm of Brexit will be exacerbated if the UK Government decides to crash out of the EU without a deal. Such an outcome, which the Prime Minister refuses to rule out, represents a clear and present danger to Scotland’s economy.
“There will be severe impacts for the economy, and for people and businesses across Scotland, under a ‘no-deal’ Brexit and these impacts have the potential to push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008.
“When I met with the Chief Secretary to Treasury in Cardiff last week, I urged her to rule out a ‘no-deal’ Brexit and give me a cast iron guarantee that all lost EU funding would be replaced in full after Brexit. She could do neither.
“We will continue to call on the UK Government to immediately rule out the possibility of a 'no-deal’ Brexit and extend the Article 50 process. As a responsible government we are also continuing - and indeed intensifying - our work to prepare for all outcomes as best we can. However, whilst we will do everything we can to prepare, we will not be able to mitigate all of the impacts of the UK Government’s approach.”
