The Welsh economy grew by 0.9% in the final quarter of 2020, according to new figures from the Office for National Statistics.
Gross domestic product (GDP) for England rose 1.2%, Scotland by 2.3%, Northern Ireland 0.7%, over Q3.
The figures were off a strong bounce back for the economy in Q3 last year when the Welsh economy achieved a record growth rate of 14.4%. This followed the impact of the first pandemic lockdown in Q2 which contracted the Welsh economy by 15.2%.
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In Q4 the biggest sector growth in Wales, at 8.5%, was in administrative and support services with the biggest contraction, at minus 19.3%, in accommodation and food service activities
Of the nine English regions, London saw the largest growth in Q4, with an increase of 3.1%, while the only two regions estimated to have contracted were the East Midlands and West Midlands, which fell by 0.8% and 0.3% respectively.
The figures comes as the influential EY Item Club now expects the UK economy to grow 7.6% this year – the fastest rate of growth since 1941.
Its summer forecast is up on the 6.8% it predicted in the spring. For 2020 it is projecting GDP growth 6.5%, compared to 5% growth previously. This will be followed by growth of 2.1% in 2023 and 1.6% in 2024.
Karen Kirkwood, office managing partner at EY in Wales and the south west and Wales of England, said: “While elements of the forecast remain uncertain, the UK has all the ingredients for a strong economic recovery from the pandemic. There is the possibility of a virtuous circle of positive expectations among businesses about rising consumer confidence and spending which, in turn, could boost firms’ confidence and output further. The fuel to sustain this circle – in the form of strong household and corporate balance sheets, and supportive fiscal and monetary policies – is there too.
“After almost 18 months of significant disruption, businesses have some space to plan ahead and invest in confidence. This could help businesses catch-up on the growth they’ve missed out on if they take the right steps to adjust to a return to a more familiar business environment.”
