Czech economic growth to remain relatively weak this year While we estimate GDP growth at 0.9% in 2024, we expect it to accelerate to 1.5% in 2025. In our view, the only source of economic growth this year will be domestic demand, driven mainly by a continued recovery in household consumption. By contrast, industry is likely to contract for the third year in a row, contributing to a lower export performance of the economy.

Inflation to stabilise close to the 2% target in 2H25 The first half of the year could be marked by higher volatility, but inflation should remain safely within the CNB’s tolerance band. We expect inflation to be 2.2% in 2025 as a whole and to fall to 2.1% in 2026. Our expectation for easing inflation is based on cheaper energy, subdued consumer demand and weak industrial output. On the other hand, food and housing prices are likely to rise more sharply.