The Czech economy began the year with renewed momentum. In the first quarter of 2025, gross domestic product (GDP) rose by 0.8 per cent compared to the previous quarter and by 2.2 per cent year-on-year. Private consumption and rising inventories made notable contributions to growth, although foreign trade remains subdued.
According to the Czech Statistical Office (ČSÚ), GDP increased by 0.8 per cent in Q1 2025 compared to the previous quarter. Year-on-year, economic output grew by 2.2 per cent.
Gross value added (GVA), another key indicator of economic activity, also rose—by 1.3 per cent quarter-on-quarter and 2.5 per cent year-on-year. The industrial sector in particular contributed to this positive development, recording growth of 1.6 per cent. The construction industry (+3.4%), the information and communication sector (+2.0%) and the finance and insurance sector (+5.9%) also saw notable gains. The only negative outlier was the trade, transport, hospitality and accommodation group, which contracted by 0.6 per cent.
Year-on-year, nearly all sectors of the economy posted gains—industry alone contributed 0.4 percentage points to GDP growth, while trade and tourism added 0.5 percentage points. “Overall, companies are once again more robust and more willing to invest than they were a year ago,” commented one industry expert.
On the demand side, the Czech Statistical Office reported that the positive quarterly figures were primarily supported by higher household consumption and increased investment. In contrast, government spending declined slightly, which somewhat dampened overall growth. Unlike the previous year—when the trade deficit was a greater hindrance—foreign trade had a neutral effect this quarter.
Specifically, household consumption rose by 0.1 per cent compared to the previous quarter and by 2.5 per cent year-on-year. Public expenditure fell by 1.5 per cent quarter-on-quarter but remained 1.9 per cent above the level of the previous year.
Investment, measured as gross fixed capital formation, increased by 1.1 per cent quarter-on-quarter but declined by 0.6 per cent year-on-year. This was mainly due to lower investment in machinery, equipment and vehicles. Conversely, investment in buildings and structures increased. The change in inventories stood at -4.6 billion korunas, a significant improvement over the previous year.
Foreign trade painted a mixed picture: exports rose by 2.8 per cent in real terms compared to the previous quarter and by 3.6 per cent year-on-year, primarily due to higher exports of electrical equipment and machinery. However, imports also increased—by 2.1 per cent quarter-on-quarter and by 4.6 per cent year-on-year. The balance of trade in goods and services amounted to 140.8 billion korunas, slightly above last year’s figure.
