According to the Ministry of Finance's macroeconomic forecast published on 6 November 2026, the Czech economy is expected to maintain moderate growth despite geopolitical tensions and volatility in global energy markets. GDP growth is projected to reach 1.7% in 2026, before accelerating to 2.5% in 2027.

Domestic demand will remain the main growth driver. Household consumption is forecast to rise by 2.8% in 2026, supported by increasing real wages, while investment is expected to grow by 5.4%. However, growth is being constrained by weaker foreign trade and declining inventories. In 2027, a gradual recovery in external demand and global supply chains is expected to support exports, while household consumption and investment are projected to increase by 2.7% and 2.5%, respectively.

Inflation is expected to average 2.1% in 2026 before rising to 3.1% in 2027, mainly due to higher household energy costs and food prices. Nevertheless, wage growth is forecast to outpace inflation, supporting household purchasing power.

The labour market is expected to remain tight amid persistent labour shortages. The unemployment rate is projected at 3.0% in 2026, declining slightly to 2.8% in 2027.

The Ministry identifies geopolitical developments, particularly the ongoing conflict in the Middle East, as significant downside risks to the outlook. Disruptions to energy production and transportation could drive up business costs and undermine investment confidence. Other key uncertainties include developments in global energy markets, international trade policy and the European automotive industry.

Source: CTK

Prepared by the team of foreign offices CzechTrade Japan