The Scottish agricultural sector has benefited from migrant workers

The Scottish Item Club research group said for the first time in generations more people were coming to Scotland.

However, Dougie Adams, economic adviser to the group, said the forces driving migration to Scotland were temporary.

He also warned that Scotland's economy was predicted to lag behind the UK, and Scots could face a relative decline in living standards.

Mr Adams said migration had been driven by the tightness of the Scottish labour market, the relative affordability of housing in Scotland and a well-publicised one-off boost for migration of young workers from new EU members.

The unexpected upturn in the population resulted in a rise of about 41,000 (0.8%) in the two years to mid 2005.

There has been an over-reliance on buoyant public spending for growth Dougie Adams Ernst & Young

A number of Scottish sectors had benefited including agriculture, food processing and hospitality, he said.

He added: "However, it is only in the last two to three years that Scotland has gained population from overseas, the UK has been reaping the benefits since the mid 1990s.

"We expect the inflow to peter out over the next few years - with a gain of only another 5,000 over the next three years, reflecting Scotland's relatively slow economic growth compared with southern England."

The report predicted that the Scottish economy was on track to achieve modest growth of 1.9% GDP in 2006.

However, it said Scotland's growth would lag behind the rest of the UK, which is expected to grow by 2.3%.

Furthermore, the gap between Scotland and the rest of the UK, in terms of GDP growth, would widen even further in 2007 with predicted rises of 2% and 2.7% respectively.

World growth

Mr Adam said: "The growth challenge facing Scotland is clearly demonstrated by the economy's inability to benefit from recent strong world conditions.

"With so little benefit flowing through from the best spell of world growth in a generation, there has been an over-reliance on buoyant public spending for growth.

"As a result when public spending hits the buffers from 2008, it will be difficult for the Scots to avoid a relative decline in their living standards compared with the most prosperous parts of the UK."