The Czech economy continued to grow at a solid pace in the first half of this year, although the growth was slightly slower than last year. GDP increased by 0.4% quarter on quarter in 2026 Q2 (0.2% in 2026 Q1), while the year-on-year growth rate eased to 1.9% from 2.2% in Q1, the lowest annual growth rate in the past seven quarters. Growth in fixed investment accelerated and household consumption remained robust, but a marked decline in inventories dampened overall growth.
Investment activity has recovered significantly this year, with fixed investment rising by 7.1% year on year in Q2, the highest growth rate in four years. Investment in housing and buildings was the main driver, which was also reflected in the solid performance of the construction sector. Investment in the vehicle fleet also increased year on year. At the same time, household consumption continued to grow at a brisk pace, rising by 2.7% year on year and contributing 1.1 percentage points to overall GDP growth. This positive contribution was offset by a decline in inventories, which reduced GDP growth by a significant 1.3 percentage points. Meanwhile, government consumption continued to rise gradually in Q2 (1.0% year on year). Foreign trade made a broadly neutral contribution to GDP growth (-0.1 percentage point), owing to a modest acceleration in export growth (3.3% year on year) and a marked slowdown in import growth (3.7% year on year).
Domestic demand this year has been stronger than suggested by the final GDP result. Taken together, growth in fixed investment and household consumption made one of the largest contributions to GDP growth in the past four years. However, this positive effect was offset by an exceptional increase in imports in Q1 and by a marked decline in inventories in Q2. Exports have also shown solid growth. The overall assessment of economic activity may thus be more favourable than indicated by the slowdown in GDP growth to its lowest rate since autumn 2024.
On the supply side, all sectors again contributed to growth in gross value added, with value added growth slowing only in wholesale and retail trade, IT services and industry.
The results for Q2 came in below the CNB’s forecast due to a negative surprise in inventories. By contrast, fixed investment grew faster than expected, while household consumption continued to grow at a solid pace. We had expected economic growth of 2.2% this year. However, the somewhat weaker result for the first half of the year has increased the likelihood that GDP growth for 2026 as a whole will be closer to 2%.
Petr Sklenář, Executive Director of the Monetary Department
2026 Q2
year-on-year in %
actual figure
MPR Summer 2026
Gross domestic product
1.9
2.2
Household consumption
2.7
2.8
General government consumption
1.0
1.4
Gross fixed capital formation
7.1
5.0
Change in inventories (in p. p.)
-1.3
0
Exports of goods and services
3.3
5.2
Imports of goods and services
3.7
6.9
Net exports (in p. p.)
-0.1
-0.8
prices of 2020 (chain-linked), seasonally adjusted
Inventories dampen GDP growth in 2026 Q2
The CNB comments on the GDP figures for 2026 Q2
The Czech economy continued to grow at a solid pace in the first half of this year, although the growth was slightly slower than last year. GDP increased by 0.4% quarter on quarter in 2026 Q2 (0.2% in 2026 Q1), while the year-on-year growth rate eased to 1.9% from 2.2% in Q1, the lowest annual growth rate in the past seven quarters. Growth in fixed investment accelerated and household consumption remained robust, but a marked decline in inventories dampened overall growth.
Investment activity has recovered significantly this year, with fixed investment rising by 7.1% year on year in Q2, the highest growth rate in four years. Investment in housing and buildings was the main driver, which was also reflected in the solid performance of the construction sector. Investment in the vehicle fleet also increased year on year. At the same time, household consumption continued to grow at a brisk pace, rising by 2.7% year on year and contributing 1.1 percentage points to overall GDP growth. This positive contribution was offset by a decline in inventories, which reduced GDP growth by a significant 1.3 percentage points. Meanwhile, government consumption continued to rise gradually in Q2 (1.0% year on year). Foreign trade made a broadly neutral contribution to GDP growth (-0.1 percentage point), owing to a modest acceleration in export growth (3.3% year on year) and a marked slowdown in import growth (3.7% year on year).
Domestic demand this year has been stronger than suggested by the final GDP result. Taken together, growth in fixed investment and household consumption made one of the largest contributions to GDP growth in the past four years. However, this positive effect was offset by an exceptional increase in imports in Q1 and by a marked decline in inventories in Q2. Exports have also shown solid growth. The overall assessment of economic activity may thus be more favourable than indicated by the slowdown in GDP growth to its lowest rate since autumn 2024.
On the supply side, all sectors again contributed to growth in gross value added, with value added growth slowing only in wholesale and retail trade, IT services and industry.
The results for Q2 came in below the CNB’s forecast due to a negative surprise in inventories. By contrast, fixed investment grew faster than expected, while household consumption continued to grow at a solid pace. We had expected economic growth of 2.2% this year. However, the somewhat weaker result for the first half of the year has increased the likelihood that GDP growth for 2026 as a whole will be closer to 2%.
Petr Sklenář, Executive Director of the Monetary Department
prices of 2020 (chain-linked), seasonally adjusted