The Czech economy is expected to accelerate its growth to approximately 2% next year, with household consumption being the main driver. This will be supported by improving economic sentiment, lower inflation, rising real wages, and decreasing interest rates, which will enhance credit availability and stimulate corporate investment activity. On the other hand, weak foreign demand, particularly in the industrial sector, will act as a brake on economic growth.

According to estimates from the Ministry of Finance, GDP growth could reach up to 2.5%, while the Czech National Bank forecasts a growth rate of 2.4%. Inflation is expected to remain under control, around 2.5%. Service prices, which increased faster than goods prices this year, should return to normal levels. Household purchasing power will recover gradually, but real wages will not reach pre-pandemic levels until around mid-2026.

Unemployment is projected to rise slightly to 4%, mainly due to weaker performance in the industrial sector and challenges related to demand from Germany. However, it will remain among the lowest in the European Union, and analysts do not anticipate significant layoffs. Companies are expected to focus more on improving the efficiency of existing teams rather than hiring new employees.

Domestic factors such as higher consumption and better credit availability will support growth, even as global uncertainties and weaker foreign demand present certain risks. The outlook for 2025 is positive but remains dependent on developments abroad, particularly in European industry.

Source: Forbes
Prepared by the team of foreign office CzechTrade South Korea (Seoul)