EDINBURGH - Scotland's economy could shrink by up to 7 percent if Britain leaves the European Union without a deal on March 29, according to a report by the Scottish government's chief economist Gary Gillespie on Thursday.

Last year, the Bank of England said the UK economy could slump as much as 8 percent if Prime Minister Theresa May fails to reach a deal in time. Scotland makes up less than one tenth of Britain's overall economy but is responsible for the United Kingdom's biggest food and drink exports, such as whisky and salmon.

The report set out two "no-deal" scenarios for Scotland, one which saw a few months of supply chain disruption and a second which predicted longer term disruption.

Trade would be damaged, it said, with the potential for a drop in Scottish exports of up to one fifth and a fall in business investment of up to 1 billion pounds ($1.3 billion) in 2019.

Gillespie, whose role is independent of the devolved Scottish government, also spoke of a depreciation in sterling of up to 30 percent and a consequent fall in migration on which Scotland's sparsely populated outlying regions, tourism and fresh food production depend to a large extent.

(Reporting by Elisabeth O'Leary; editing by Stephen Addison) ((elizabeth.oleary@tr.com; +44 131 248 9208; Reuters Messaging: elizabeth.oleary.thomsonreuters.com@reuters.net))