The Czech economy proved resilient in the second quarter of 2025. Despite weaker investment and a negative contribution from foreign trade, gross domestic product (GDP) recorded clear growth both quarter on quarter and year on year.
According to the latest revised estimate, GDP rose by 0.5 per cent compared with the first quarter, while it was up by 2.6 per cent year on year. The main drivers of growth were higher consumption expenditure and stockbuilding, whereas weaker investment and a negative trade balance weighed on the result.
Gross value added increased by 0.5 per cent quarter on quarter and by 2.8 per cent year on year. The strongest performance came from the trade, transport, hospitality and accommodation sectors, which grew by 1.7 per cent. Industry (+0.3 per cent) and construction (+1.9 per cent) also made positive contributions, while financial and insurance services contracted by 4.6 per cent.
“On the demand side, rising consumer spending and changes in inventories were the main drivers. Foreign trade, on the other hand, had a dampening effect,” explained Vladimír Kermiet, Director of the Department of National Accounts at the Czech Statistical Office (ČSÚ).
Consumer expenditure increased by 1.1 per cent quarter on quarter and by as much as 3.1 per cent year on year. Household consumption was 3.4 per cent higher than in the same period of the previous year, while public institutions raised their consumption spending by 2.2 per cent.
Investment presented a mixed picture: while gross fixed capital formation grew by 0.5 per cent compared with the previous quarter, it fell by 0.2 per cent year on year. Investment in residential property as well as in machinery and equipment declined, whereas spending on other buildings and means of transport increased.
The trade balance was weaker: at CZK 118.8 billion, it was CZK 11 billion below the figure for the same quarter last year. Although exports grew by 4.2 per cent in real terms, imports rose much more strongly, by 6.0 per cent.
The labour market also showed positive signs: total employment grew by 0.5 per cent quarter on quarter and by 1.0 per cent year on year. In addition, labour costs rose sharply – up by 8.0 per cent compared with the previous year.
