After several years of stagnation, the Czech economy appears poised for brighter times in 2026. According to Dominik Rusinko, Chief Economist at Patria Finance, the upcoming year should bring favorable macroeconomic conditions—solid GDP growth close to its potential, inflation at the Czech National Bank’s target, stable interest rates, and a gradually strengthening koruna.

Consumption and Wages to Drive Growth

Gross domestic product is expected to maintain growth above 2%, driven primarily by consumer demand. “The ongoing increase in wages—averaging around 5.5%—and continued stabilization in the labor market will boost household consumption,” Rusinko explains. “It’s important that this faster growth will once again be reflected in employees’ real income. Moreover, the structure of growth will be more balanced than in previous years, with investments and foreign trade gradually making positive contributions alongside consumption,” he adds.

A short-term impulse will also come from fiscal policy under the new government. The cancellation of the renewable energy surcharge, which takes effect in January, will reduce electricity prices, and higher wages in the public sector are also on the table. However, these measures come at the expense of a higher deficit. Rusinko estimates the public finance deficit could approach 3% of GDP this year.

Inflation Near Target Thanks to Lower Energy Prices

Lower energy prices—driven both by government measures and global market trends, including cheaper oil and gas—should help push inflation toward the central bank’s 2% target. A temporary dip below this level may even occur in January. “We expect a slight easing of services inflation as well, though we remain cautious,” Rusinko notes. “Strong household demand, a loose fiscal stance, and a still-overheated property market will keep core inflation pressures elevated.” These factors are likely to persuade the Czech National Bank to maintain its key rate at 3.5% throughout the year.

Good Times Ahead—With a Few Clouds

Despite the generally positive outlook, several risk factors remain. These include the performance of the German economy, which, after six years of stagnation, is only now showing signs of cyclical recovery. External uncertainties loom large as well—from potential policy shifts under Donald Trump’s U.S. administration to ongoing geopolitical instability, particularly the war in Ukraine.

In short, while the Czech economy enters 2026 with a renewed sense of optimism, it must still navigate a landscape marked by lingering global uncertainties and structural challenges at home.

Compiled by the team of CzechTrade Netherlands

Source:

https://www.cfotrends.cz/clanky/optimisticke-vyhlidky-ceske-ekonomiky-ani-rok-2026-se-vsak-neobejde-bez-negativnich-rizik/
CFO Trends
January 2, 2026