The Czech economy showed resilience in 2024, achieving a growth rate of 1%, according to the Czech Statistical Office. This growth was primarily driven by increased household consumption, which has been a consistent driver of economic activity. Actual consumption per capita increased by 2.4% year-on-year. Despite this, the savings rate remained high at 18.8%, indicating cautious consumer behaviour. Analysts note that while household spending has been robust, investment activity remains weak, which could hinder long-term economic growth.

In the fourth quarter of 2024, GDP rose by 1.8% year-on-year and 0.7% quarter-on-quarter, surpassing earlier estimates. However, government spending and capital formation hurt growth. Analysts predict that economic growth will accelerate to around 2% in 2025, driven by continued household consumption and potentially improved investment activity. However, risks from external factors, such as U.S. tariffs and European economic developments, could impact this forecast.

The Czech Republic offers a stable economic environment for foreign investors with steady growth supported by strong household consumption and government expenditure.

Source: ČTK

Prepared by the CzechTrade United Kingdom & Ireland Office