Published:31.07.2025
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Czech Economy Grew by 2.4% in Q1, Fastest Pace in Three Years

Compared to the previous quarter, gross domestic product (GDP) rose by 0.7 percent.

The main drivers of year-on-year growth were household and government consumption, while foreign trade had a negative impact. On a quarterly basis, household consumption and investments supported the GDP increase.

"The financial situation of households slightly improved in Q1. Both income and real consumption expenditures increased. Real income from employment rose by 2.8 % year-on-year," said Vladimír Kermiet, Director of National Accounts at the CZSO.

Analysts expect that the Czech economy will grow by approximately two percent for the entire year, doubling the 1.1 % growth recorded in 2024. They cite household consumption, inventory development, and public spending as key growth contributors. However, they also warn of external risks, including potential trade tensions between the United States and the European Union.

Despite increased consumer activity, the household saving rate dropped to 18.3 % in Q1, a decrease of 1.2 % points year-on-year. Household investment stagnated quarter-on-quarter and declined year-on-year.

"Investment remains weak due to uncertainty in demand and energy prices," said Petr Dufek, Chief Economist at Banka Creditas. Radomír Jáč, Chief Economist at Generali Investments CEE, added that a resolution of US-EU trade tensions could renew companies’ appetite for investment.

Compiled by the Dutch team of CzechTrade

Source: ceskenoviny.cz