GDP growth steady in Q4

Stable expansion meets expectations in Q4: According to a preliminary estimate, the economy expanded 0.5% on a calendar- and seasonally adjusted quarter-on-quarter basis in Q4, unchanged from Q3’s result. The reading came in above the H1 average and was in line with market expectations. On a calendar- and seasonally adjusted annual basis, economic growth rose to 1.6% in Q4 (Q3: +1.4% yoy), marking the best result since Q3 2022 and lifting 2024 GDP growth to 1.0% (2023: +0.1% yoy).

Domestic demand strengthens, but exports weaken: A complete breakdown will be released on 28 February, but the statistical office noted that the result reflected stronger domestic demand broadly outweighing weaker exports momentum: The former was likely bolstered by laxer financing conditions, while the latter were likely hampered by a still-weak external demand, especially from top trade partner Germany.

GDP growth to come in around its past 10-year average in 2025: Our panelists expect GDP growth to stabilize around Q4’s sequential pace in the coming quarters. Accordingly, in 2025 as a whole, economic growth should more than double from 2024’s level, completing its recovery path to hover around its past decade average of 2.2%. Lower interest rates will fuel a rebound in fixed investment, and stronger EU and German demand will buttress exports. Moreover, consumer spending should provide impetus on the back of healthy real wage growth. Higher-than-expected U.S. tariffs and a protracted malaise in the German industrial sector are downside risks.

Panelist insight: Commenting on the outlook, Jiri Polansky, analyst at Erste Bank, stated: “Growth will continue to be driven primarily by consumption and foreign trade, and we anticipate a halt in inventory declines this year. Conversely, the weak performance of the German economy will continue to exert downward pressure. Risks remain elevated and skewed towards lower Czech GDP growth.” Commenting on potential GDP growth drivers, EIU analysts stated: “The return of slowing inflation and monetary loosening in the second half of 2025 will offer support to the household sector. Continued strong wage gains amid a healthy labour market are supporting a recovery in private consumption.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Czech investment projections for the next ten years from a panel of 18 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable investment forecast available for Czech investment.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Czech investment projections.

Want to get access to the full dataset of Czech investment forecasts? Send an email to info@focus-economics.com.