Economic experts have said the cost of the global pandemic means an independent Scotland could face an even bigger budget deficit than previously thought.
The Institute for Fiscal Studies (IFS) estimated the annual gap between what the Scottish Government raises in taxes and what it spends on public services could surpass the £11.2billion previously suggested by the SNP’s own economic blueprint.
IFS economist David Phillips warned the impact of lockdown could mean an even tougher starting point for an independent Scotland than the one predicted by the 2018 Growth Commission report.
That could mean tax rises and services cut to help bring the dificit under control and reassure global financial markets.
Pro-Union campaigners said this could result in "devastating cuts" to schools and hospitals, but the SNP said Scotland could only meet its full potential if it obtained full control over its economy.
“The deficit would likely be higher than they assumed. This is partly due to the impact of Covid-19 and partly because even prior to the crisis the UK Government had released the purse strings, Phillips told the Scottish Sun.
“Addressing this bigger deficit would require greater tax rises and/or spending restraint — effectively austerity — or a strong uptick in growth.”
It comes as the Scottish Government prepares to publish its annual GERS report this week, which estimates the difference between what the country raises in taxation and what it spends on public services.
Economic experts believe the latest data will show the existing deficit has grown further than last year as Scotland's economy is rocked by the global pandemic.
Support for Scottish independence has risen over the last five months as Scots have consistently ranked Nicola Sturgeon's response to health crisis above that of Boris Johnson's.
But pro-Union campaigners believe not enough attention has been paid to the economic challenges a new Scottish state could face in a post-Covid world.
Pamela Nash, chief executive of Scotland in Union, said:“Leaving the UK would result in devastating cuts for our NHS and schools.
“The SNP’s blueprint for separation would cause economic hardship for families and wreck our hopes of economic recovery following COVID-19.
“The publication of this year’s GERS figures must come with some honesty from the SNP about how much it would cut from the health service and how much it would put taxes up by.
“But rather than force deeper austerity on Scotland with separation, by remaining in the UK we can invest in jobs, education and the NHS. Scotland is better off in the UK."
SNP Depute Leader Keith Brown said: "The Coronavirus crisis has created unprecedented demands on Government spending across the world.
"Every country has had to borrow substantially to combat the pandemic. Scotland is not unique in this respect.
"However, Scotland is unique in that we do not ourselves have the power to borrow to meet the specific challenges we face – independence will give us those powers.”
