Recovering domestic demand is driving growth in the economy
The CNB comments on the GDP figures for 2025 Q2
As expected, the Czech economy continued to grow apace in 2025 Q2. GDP rose by 2.6% year on year, the highest figure in three years. GDP increased by 0.5% compared to the previous quarter, with the economy maintaining the pace of previous quarters and dispelling concerns that growth in Q1 would be significantly affected by one-off factors. Conversely, this confirms the longer-term trend of the recovery of the Czech economy, driven mainly by growing domestic demand.
Household consumption expenditure rose by 3.4% year on year in Q2, the highest growth rate since the start of 2022. In addition, solid growth in government expenditure continued at a solid rate of around 2%. Additions to inventories also made a positive contribution. Fixed investment continues to show mixed developments, although they are also showing recurring signs of a turnaround. Fixed investment decreased slightly year on year (-0.2% y-o-y), but it rose in quarter-on-quarter terms (+0.5% q-o-q) for the second consecutive quarter, increasing the likelihood of this indicator returning to growth in the second half of this year.
Conversely, the contribution of foreign trade was slightly negative again. A recovery in domestic demand is increasing imports (+6.0% y-o-y), while exports are growing at a slower pace (+4.2% y-o-y) due to subdued external demand. The concerns that the growth in exports in Q1 would be fundamentally affected by stockpiling by European exporters ahead of the introduction of US tariffs did not materialise. The data for Q2 indicate that the key factor is a broader and gradual recovery of the European economy.
Overall, the result for Q2 is in line with the CNB’s forecast, according to which the Czech economy will expand by 2.6% this year due to a recovery in domestic demand.
Petr Sklenář, Executive Director of the Monetary Department
2025 Q2
year-on-year in %
actual figure
MPR Summer 2025
Gross domestic product
2.6
2.7
Household consumption
3.4
3.3
General government consumption
2.2
2.4
Gross fixed capital formation
-0.2
-0.3
Change in inventories (in p. p.)
1.4
0.9
Exports of goods and services
4.2
3.1
Imports of goods and services
6.0
3.7
Net exports (in p. p.)
-0.8
-0.2
prices of 2020 (chain-linked), seasonally adjusted
Recovering domestic demand is driving growth in the economy
The CNB comments on the GDP figures for 2025 Q2
As expected, the Czech economy continued to grow apace in 2025 Q2. GDP rose by 2.6% year on year, the highest figure in three years. GDP increased by 0.5% compared to the previous quarter, with the economy maintaining the pace of previous quarters and dispelling concerns that growth in Q1 would be significantly affected by one-off factors. Conversely, this confirms the longer-term trend of the recovery of the Czech economy, driven mainly by growing domestic demand.
Household consumption expenditure rose by 3.4% year on year in Q2, the highest growth rate since the start of 2022. In addition, solid growth in government expenditure continued at a solid rate of around 2%. Additions to inventories also made a positive contribution. Fixed investment continues to show mixed developments, although they are also showing recurring signs of a turnaround. Fixed investment decreased slightly year on year (-0.2% y-o-y), but it rose in quarter-on-quarter terms (+0.5% q-o-q) for the second consecutive quarter, increasing the likelihood of this indicator returning to growth in the second half of this year.
Conversely, the contribution of foreign trade was slightly negative again. A recovery in domestic demand is increasing imports (+6.0% y-o-y), while exports are growing at a slower pace (+4.2% y-o-y) due to subdued external demand. The concerns that the growth in exports in Q1 would be fundamentally affected by stockpiling by European exporters ahead of the introduction of US tariffs did not materialise. The data for Q2 indicate that the key factor is a broader and gradual recovery of the European economy.
Overall, the result for Q2 is in line with the CNB’s forecast, according to which the Czech economy will expand by 2.6% this year due to a recovery in domestic demand.
Petr Sklenář, Executive Director of the Monetary Department
prices of 2020 (chain-linked), seasonally adjusted