According to Strathclyde University's Fraser of Allander Institute, Scotland's recovery from the recession will be much slower than the rest of the UK, as the economy is hit by particularly hard by serious cuts to public spending.
The think tanks blames the deeper recession in Scotland mainly on a bigger drop in the output of its financial sector. It is also though that the Scottish economy may confound earlier predictions by not achieving growth in the fourth quarter.
Finance Secretary John Swinney said the report showed there were grounds for "cautious optimism" though any economic recovery was "fragile at this stage", while labour's Iain Gray warned it painted a "worrying picture" and blamed the weak recovery on the SNP government.
Professor Ashcroft of the FOAI said: "This hasn't happened before, certainly since the Second World War, in terms of the output loss being greater in Scotland than the rest of the UK
"That is because of the nature of the recession - the financial services crisis. There has been significant cutback in financial services activity."
The FOAI now forecasts a much greater rise in unemployment this year than it did in its previous forecasts in June.
Tory finance spokesman Derek Brownlee said he hoped the prediction that Scotland was emerging from recession was true, while LibDem leader Tavish Scott said the report showed that labour's handling of the "banking Shambles" was a key reason for Scotland being hit so hard by the recession.
Doesn't surprise me Scottish labour blame the recession on the SNP. After all they can't say it is Gordon Brown to blame can they? Wouldn't want to upset the saviour of the world.