Economic growth rises in Q3 2025

GDP growth reading upwardly revised: A second release revealed that the Czech Republic's GDP increased 0.8% on a seasonally adjusted quarter-on-quarter basis in Q3, marking a marginal upward revision from the initial estimate of 0.7% and following 0.4% growth in the previous quarter. On a seasonally adjusted year-on-year basis, economic output increased 2.8% in Q3, following a 2.6% expansion in the previous quarter.

Exports preserve economic momentum: The third quarter’s acceleration was spearheaded by the external sector. Compared with the prior quarter's data, the reading for exports of goods and services improved in Q3 (+1.0% in seasonally adjusted quarter-on-quarter terms vs +0.5% in Q2). In contrast, readings softened for private consumption (+0.3% vs +1.2% in Q2), government consumption (+0.1% vs +1.6% in Q2), fixed investment (+0.4% vs +1.7% in Q2) and imports of goods and services (0.0% vs +2.1% in Q2). Net trade contributed to growth following Q2’s detraction, as exports increased sharply in the face of stagnant imports; a substantial increase in service exports buttressed momentum, likely tied to tourism or transportation services. Moreover, favorable labor market conditions, positive consumer sentiment plus strong growth in the construction sector supported domestic demand.

GDP growth to broadly steady next year: Our panelists expect sequential GDP to grow at roughly half of Q3’s pace in the final quarter of 2025, before stabilizing around 0.6% through 2026. In 2026 as a whole, GDP growth should hover near 2025’s reading, undershooting the Central Eastern European average. Economic momentum will be propped up by solid domestic demand and exports. The new government’s fiscal policy is key to monitor, and German fiscal stimulus poses an upside risk.

Panelist insight: Economists at Erste Bank commented: “Next year, GDP growth could be at a similar level, with continued strong consumption potentially complemented by improved foreign trade developments (but at the expense of inventory contributions).”

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