GDP in Q4: Slight slowdown at the end of the year

The pace of economic growth slowed slightly at the end of the year, but in the context of recent years and current conditions in the global economy, the current development of the Czech economy can be assessed positively. In the fourth quarter of last year, GDP increased by 0.5% compared to the previous quarter and was 2.4% higher year-on-year. For 2025 as a whole, GDP grew by 2.5%.

As in previous quarters, GDP growth was mainly driven by rising household consumption expenditure. Household consumption has been growing for the second year in a row thanks to lower inflation and renewed growth in real wages. This is now being accompanied by a gradual decline in the savings rate, which has remained at above-average levels following a series of economic shocks in previous years, starting with the pandemic and ending with a wave of inflation.

In terms of the contribution of individual sectors to value added growth in the Czech economy, it is important that industry is now joining trade and construction in making a positive contribution. In addition, there have been signs of improvement in Czech and German industry since the turn of the year.

The Czech economy is now in relatively good shape. GDP growth has accelerated above its long-term average. The unemployment rate remains low. Inflation also remains low and stable. The trade balance is showing a slight surplus, and the current account balance is roughly in equilibrium. Only public finances are not on a sustainable long-term trajectory.

This year, we expect economic conditions to improve further and GDP growth to accelerate to 3.1%. Rising household consumption will be accompanied by higher investment activity, and the increase in the government sector deficit will provide a positive fiscal impulse, although this is not necessary in the current situation.

In relation to the EU average, GDP per capita in purchasing power parity terms will rise to 94% this year from 92% last year.