The EY Scottish Item Club has downgraded Scottish economic growth to just 1.2 per cent for 2016, lower than the 1.9 per cent previously predicted.
That is almost half the economic growth of 2.3 per cent forecast across the rest of the UK.
The longer term forecasts for Scotland are equally bleak, with the organisation projecting that in 2018 Scottish growth will be 1.8 per cent, against 2.4 per cent for the UK.
The Scottish Conservatives have demanded the SNP explains why, after nine years in power, the party continues to fail Scotland economically.
One positive highlighted in the report is the economic activity potentially generated by the UK Government City Deals for Scotland, which will be implemented in places like Aberdeen, Edinburgh and Glasgow.
However, with other reports today that the oil and gas industry may struggle even more before things improve, there are fears that growth in Scotland could decline even further.
Scottish Conservative shadow economy secretary Dean Lockhart said:
“The SNP has now been in government in Scotland for nine years.
“It must explain why Scotland continues to trail the rest of the UK economy so badly, not just because of the slowdown in the North Sea but across many other sectors of the economy.
“The SNP can’t blame Westminster for this - its inability to understand economic and business growth strategies and the uncertainty surrounding many of their core policies are hitting Scotland hard.
“This report shows that while the UK Government has done its bit with City Deals and ensuring UK-wide growth, the Scottish Government has been found wanting.
“And at a time when we need to start exploring new ways of generating jobs, the SNP has decided to ban shale gas extraction, even though energy firms want to explore it, with many potential jobs to be gained.
“With more powers on their way to Holyrood, and with the SNP hinting at a higher tax agenda, we fear that the economic gap between Scotland under the SNP and the rest of the UK may only widen further.”