The Scottish economy is forecast to grow by 2.3 percent in 2015, the Scottish Government Chief Economist announced on Friday.
Sustained growth in the Scottish economy is expected to be maintained this year with further increases in employment and output, said the State of the Economy report.
The report notes that although conditions are improving, growth in Europe, one of Scotland's key export markets, is still muted. Along with a weaker outlook in many emerging economies, this creates some uncertainty for the outlook here in Scotland.
The report also shows that whilst the combined impact of the lower oil price on output and employment in the Scottish economy as a whole will be broadly neutral, there will be important regional and sectorial effects given the distribution of activity across the economy.
The labour market has seen continued jobs growth alongside record female participation in the work force, although challenges remain around wages and underemployment, said the report.
In 2014, the Scottish economy grew strongly and expanded by 2.7 percent during the year as a whole, the fastest pace since before the recession in 2006, which was driven by rises in domestic and inward investment, as well as improving conditions in key export markets such as the United States, it added.
Scottish Deputy First Minister John Swinney said: "This Government is committed to building a fairer, more sustainable, and more resilient economy."