Tuesday, 3 March 2026
The Czech economy expanded by 2.6 percent in 2025, according to updated figures released by the Czech Statistical Office (CZSO), which slightly revised its earlier estimate upward. The performance marks the strongest annual growth since 2022 and reflects support from both domestic spending and external demand.
In the final quarter of the year, gross domestic product increased by 2.6 percent year-on-year and by 0.6 percent compared with the previous quarter.
According to the statistical office, quarterly growth was driven mainly by stronger household consumption and higher investment activity, while inventory changes weighed on the overall result. External demand also made a positive contribution.
For the full year, household consumption rose by 3 percent, while government spending increased by 2.2 percent. Gross fixed capital formation expanded by 2 percent. The surplus in the foreign trade balance reached CZK 504.2 billion at current prices, up by CZK 0.8 billion year-on-year.
Gross value added increased by 2.8 percent, supported primarily by trade, transport, accommodation and hospitality, as well as information and communication activities and industry.
Labour market indicators also improved. Total employment grew by 1.1 percent year-on-year to approximately 5.5 million people, while the number of hours worked rose by 2.3 percent.
In the fourth quarter alone, household consumption increased by 1.3 percent quarter-on-quarter and by 3.2 percent compared with the same period a year earlier, driven mainly by spending on short-term goods and services. Government consumption rose by 1 percent quarter-on-quarter and by 2.5 percent year-on-year.
Investment activity strengthened toward the end of the year. Gross fixed capital formation grew by 1.7 percent quarter-on-quarter and by 5.3 percent year-on-year, supported in part by higher investment in residential and non-residential construction.
The external sector also recorded solid growth. In the fourth quarter, the trade surplus in goods and services reached CZK 133.9 billion, an increase of CZK 9.5 billion year-on-year. Exports rose by 0.8 percent quarter-on-quarter and by 5.1 percent year-on-year, while imports increased by 0.6 percent quarter-on-quarter and by 5.3 percent year-on-year.
Economists generally view the latest figures as evidence of stable economic conditions. Some noted that 2025 was the first year in which the Czech economy operated without the direct impact of the major shocks that affected previous periods.
Analysts also highlighted that household consumption in the fourth quarter exceeded pre-pandemic levels, indicating a recovery in consumer activity after several years of pressure from inflation and higher interest rates.
At the same time, observers pointed out that growth was supported by multiple components, including consumer spending, investment — particularly in construction, and contributions from the business sector and IT services.
Looking ahead, several economists expect the Czech economy to expand at a similar pace in 2026, with growth likely to be driven by household demand, public spending and a gradual recovery in investment.
However, they caution that external risks remain. Potential geopolitical tensions, particularly in the Middle East, could affect energy and commodity prices and pose an inflationary risk that may influence the growth outlook.
Source: CTK
