Czech economy grows significantly faster than EU average

The Czech economy grew significantly faster than the EU average in 2025. However, the Supreme Audit Office warns that structural weaknesses and rising public debt could slow further development.

The Czech economy grew significantly faster than the European Union average in 2025. Gross domestic product (GDP) increased by 2.6 per cent, while the EU economy grew by an average of 1.5 per cent. The development was driven primarily by higher household consumption.

This is highlighted by the Supreme Audit Office (NKÚ) in its opinion on the state final accounts for 2025. Despite the comparatively strong growth, the authority continues to see structural weaknesses that could weigh on the Czech Republic’s future competitiveness.

According to the NKÚ, growth was mainly based on stronger consumption and a higher number of hours worked. Labour productivity, by contrast, contributed significantly less to the upturn.

“You cannot build a long-term growth model on this,” said NKÚ President Miloslav Kala. Particularly in view of the ageing population, future growth must rely more strongly on innovation, automation and modern technologies.

High energy consumption weighs on competitiveness

The Audit Office cites the high energy intensity of the Czech economy as another problem. According to the NKÚ, it is around twice as high as the European Union average. Compared with Germany, the Czech Republic requires almost two and a half times as much energy to generate one unit of gross domestic product. This makes it more difficult for energy-intensive companies in particular to remain competitive.

There is also the demographic trend. In 2025, fewer children were born in the Czech Republic than at any time since 1785. At the same time, numerous sectors are already facing labour shortages.

Public debt continues to rise

Alongside economic growth, public debt also continued to increase. At the end of 2025, public debt reached 3.7 trillion crowns, around two trillion crowns higher than ten years earlier. The state spent 98 billion crowns on debt servicing last year. According to a Finance Ministry forecast, public debt could rise to more than 4.4 trillion crowns by 2028.

Czech Republic lags behind on innovation

The NKÚ also sees a need to catch up in research and innovation. In 2025, the state allocated more than 54 billion crowns to science, research and innovation. Nevertheless, the Czech Republic continues to rank only among the group of moderate innovators.

The country is still a long way from its goal of joining Europe’s innovation leaders by 2030. The Audit Office cites Estonia as a positive example. The significantly smaller country has so far produced 15 start-ups valued at more than one billion US dollars, compared with just four in the Czech Republic.