The Confederation of Industry of the Czech Republic (SP ČR) anticipates a 1.2% economic growth this year, with an acceleration to 2.7% next year. This forecast is more optimistic than those of the Ministry of Finance and the Czech National Bank (ČNB). SP ČR expects average inflation to be 2.5% this year, slowing to 2.2% next year.

Next year's economic growth is expected to be driven by household consumption, increased investments, including post-flood reconstruction, and a broader European economic recovery facilitated by central banks' monetary easing. However, ongoing challenges such as high energy prices, increased regulation, and a shortage of skilled labor will continue to limit more significant recovery.

Industrial production is projected to decline by 0.4% this year. High energy costs are impacting companies' competitiveness, and short-term expectations remain cautious despite some sectors performing well. SP ČR forecasts a recovery in the industrial sector next year, with a 1.8% increase in production.

Investment activity is expected to be low this year, with a modest 0.5% increase. Next year, investments are projected to grow by 3.4%, though this recovery depends on the overall investment climate, as companies are concerned about slow economic growth across Europe, particularly in Germany.

Source: Ceskenoviny.cz

Author: CzechTrade and CzechInvest Office in New York