Scotland's devolved government has welcomed the latest economic data - despite continued growth below the UK average.

Holyrood ministers insisted the prospects for the Scots economy remained good - although they warned there was no room for complacency in the wake of a slowdown in the service sector.

The figures revealed that Scottish GDP rose by 1.7 per cent over 2003 - marginally less than the 1.8 per cent recorded over the UK as a whole.

Over the the fourth quarter of 2003, GDP rose by 0.2 per cent compared to the previous quarter.

Enterprise minister Jim Wallace welcome the figures - pointing to an upturn in the fortunes of Scots manufacturing.

“I am pleased that the GDP figures for the fourth quarter of last year show that the economy continues to grow," he said.

“The latest manufacturing estimates - with growth in the sector over the last two quarters - are particularly welcome.

"This indicates that the sector is starting to recover after a sustained period of global restructuring and difficult trading conditions."

But he expressed reservations would a slowdown in growth within the food and leisure industries north of the border.

“The slight decline in the service sector this quarter is cause for some concern. However, we should not jump to any conclusions based on the numbers of a single quarter," he said.

"The overall performance of the sector over the year remains strong, with growth above the UK level."

Wallace defended the devolved dministration's record, insisting that predictions for growth remain good.

"Looking forward, independent forecasters are indicating that the outlook for this year and next is positive," he said.

"I recognise of course that there is absolutely no room for complacency.

"The underlying challenges in the economy remain the same and our long-term strategies for economic development are designed to tackle them."