The Czech Republic kicked off 2025 with its strongest quarterly economic expansion since late 2021, posting a 0.8% gain in GDP compared to Q4 and a robust 2.2% increase year-over-year, according to revised data from the Czech Statistical Bureau.

This uplift was propelled chiefly by a surge in household consumption, which contributed roughly 1.5 percentage points to annual growth, while a rise in inventories added another 1.3 points.

Government spending also provided a modest boost of 0.4 points. However, net exports and fixed investment dampened the pace, acting as drags on the overall result.

A recovery in real wages—thanks to moderating inflation—played a key role in bolstering domestic demand. Economists from institutions like Banka Creditas and UniCredit agree that this momentum lays the groundwork for growth between 1.5% and 2% by the year’s end, although they warn that global trade uncertainties—particularly new U.S. tariffs—could pose downside risks.

Sources: Czech Statistical Bureau, Reuters