Saturday, 10 May 2025
The Czech economy recorded moderate growth in the fourth quarter of 2024, with the gross domestic product (GDP) increasing by 0.7% quarter-on-quarter and 1.8% year-on-year, according to refined estimates. For the full year 2024, GDP rose by 1.0%.
Data from the Czech Statistical Office (CZSO) indicate that, after adjustments for price effects and seasonal factors, GDP in Q4 2024 was 0.7% higher than in the previous quarter and 1.8% higher compared to the same period in 2023.
Sectoral Performance and Gross Value Added
The gross value added (GVA) showed stagnation on a quarterly basis but increased by 1.1% year-on-year. In a quarter-on-quarter comparison, the strongest sectors included manufacturing (+1.0%), trade, transportation, accommodation, and food service activities (+0.4%), and real estate activities (+2.2%).
Year-on-year, the most significant contributors to GVA growth were trade, transportation, accommodation, and food services, which added 0.5 percentage points with a 3.0% increase, and real estate activities, which contributed 0.3 percentage points with a 2.1% rise. Construction also expanded, growing by 2.4% year-on-year. However, the industrial sector negatively impacted GVA growth, reducing it by 0.6 percentage points due to a 2.2% decline.
Demand-Side Factors Influencing Growth
On the demand side, higher household final consumption expenditure and changes in inventories played key roles in the quarter-on-quarter GDP increase. However, gross fixed capital formation and declining external demand had a negative effect, according to Vladimír Kermiet, Director of the National Accounts Department at CZSO.
Year-on-year GDP growth of 1.8% was mainly driven by household final consumption expenditure (+1.9 percentage points), government final consumption expenditure (+0.6 percentage points), and changes in inventories (+1.6 percentage points). Meanwhile, gross fixed capital formation (-0.7 percentage points) and external demand (-1.7 percentage points) contributed negatively.
Household final consumption expenditure increased by 1.5% quarter-on-quarter and 3.2% year-on-year, with non-durable goods purchases leading the growth. Government consumption decreased by 0.3% on a quarterly basis but rose by 3.2% year-on-year.
Gross fixed capital formation declined by 1.5% quarter-on-quarter and 2.4% year-on-year. Year-on-year growth was observed in investments in buildings, structures, and transport equipment, while other asset investments declined. The change in inventories amounted to CZK -79.5 billion, which was CZK 10.5 billion higher than in the same period in 2023.
Trade and Employment Trends
The international trade balance of goods and services at current prices stood at CZK 129.2 billion, an increase of CZK 5.1 billion compared to Q4 2023. Exports decreased by 1.5% quarter-on-quarter but rose by 1.3% year-on-year, driven mainly by electronic and optical products and electrical equipment. In contrast, exports of machinery, equipment, and motor vehicles declined. Imports fell by 1.8% quarter-on-quarter but grew by 3.1% year-on-year.
Regarding price developments in Q4 2024, the total GDP deflator increased by 0.3% quarter-on-quarter and 3.7% year-on-year.
Labour costs rose by 6.6% year-on-year in Q4 2024. Total employment decreased slightly by 0.1% quarter-on-quarter but showed a 0.2% increase year-on-year. The total number of hours worked remained unchanged compared to the previous quarter but grew by 0.5% year-on-year.
The data underscore the Czech economy’s resilience, albeit with challenges in industrial output and investment activity. Growth in household consumption and specific service sectors have helped sustain momentum despite external headwinds.
Source: Czech Statistical Office
