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Czech Economic Outlook: Muted for now, but brace for impact

30/07/2025 13:27

Impact of US tariffs to turn from positive to negative While stockpiling by US companies and households ahead of the tariffs supported Czech economic growth at the beginning of the year, this effect will fade over the rest of the year. In line with this, we expect the economy to grow by 1.9% this year, before slowing again to 1.1% next year. Although export and industrial performance will decline, household consumption and real wages should continue to recover.

Despite its current elevated level, inflation should head back down towards the target We estimate that inflation will average 2.4% in 2025, before falling to 1.9% in 2026. Rapid growth in prices of services, houses and food will keep inflation elevated this year. However, the effects of tight monetary policy, lower energy and fuel prices, and economic and labour market slowdowns should be felt fully next year. We expect wage growth to cool on the back of higher unemployment.

Autor: Jan Vejmělek,Jana Steckerová,Martin Gürtler,Jaromír Gec,Kevin Tran Nguyen
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