The economy slows slightly at the start of the year
The CNB comments on the GDP figures for 2026 Q1
The Czech economy continued to grow at a solid pace at the start of this year but slowed slightly overall. GDP increased by 0.2% quarter on quarter in Q1 (0.7% in 2025 Q4), and the year-on-year growth rate slowed to 2.2%, from 2.7% in Q4. Domestic demand also continued to grow, with growth in consumption and fixed investment picking up slightly. However, strong domestic demand was dampened by a surprisingly sharp increase in imports.
The pattern of domestic demand did not change much in Q1. Consumption remained the main driver of growth. Growth in household expenditure accelerated to 3.4% year on year from 3.2% in Q4 and was broad-based across expenditure components. The recovery in investment demand also continued at the start of the year. Fixed investment rose by 7.3% year on year, the highest increase in four years. Investment growth was also broad-based, with higher investment not only in buildings but also in machinery and in the renewal of the vehicle fleet. The recovery in investment demand supports the outlook for further growth. On the other hand, this was offset by a sharp rise in imports of 8.2% year on year. Imports grew at the strongest pace since 2021, fostering a negative contribution of foreign trade to GDP growth. Import growth thus exceeded export growth (5.8% year on year), which also accelerated slightly and reached the highest rate in three years. In addition to foreign trade, a further decline in inventories was another negative factor, reducing overall GDP growth by half a percentage point.
On the supply side, gross value added growth was again driven by all sectors, with value added growth easing only in industry, construction and trade.
The results for Q1 were below the CNB forecast, with the sharp increase in imports being the main source of surprise. By contrast, growth in household consumption and fixed investment remained solid. We had expected the economy to grow by 2.5% this year, but the somewhat weaker outcome for Q1 and the risks of adverse effects of high energy prices in the rest of the year increase the likelihood that final GDP growth will be lower.
Petr Sklenář, Executive Director of the Monetary Department
2026 Q1
year-on-year in %
actual figure
MPR Spring 2026
Gross domestic product
2.2
2.5
Household consumption
3.4
3.6
General government consumption
1.7
2.2
Gross fixed capital formation
7.3
5.3
Change in inventories (in p. p.)
-0.5
-0.9
Exports of goods and services
5.8
2.1
Imports of goods and services
8.2
2.5
Net exports (in p. p.)
-1.2
-0.1
prices of 2020 (chain-linked), seasonally adjusted
The economy slows slightly at the start of the year
The CNB comments on the GDP figures for 2026 Q1
The Czech economy continued to grow at a solid pace at the start of this year but slowed slightly overall. GDP increased by 0.2% quarter on quarter in Q1 (0.7% in 2025 Q4), and the year-on-year growth rate slowed to 2.2%, from 2.7% in Q4. Domestic demand also continued to grow, with growth in consumption and fixed investment picking up slightly. However, strong domestic demand was dampened by a surprisingly sharp increase in imports.
The pattern of domestic demand did not change much in Q1. Consumption remained the main driver of growth. Growth in household expenditure accelerated to 3.4% year on year from 3.2% in Q4 and was broad-based across expenditure components. The recovery in investment demand also continued at the start of the year. Fixed investment rose by 7.3% year on year, the highest increase in four years. Investment growth was also broad-based, with higher investment not only in buildings but also in machinery and in the renewal of the vehicle fleet. The recovery in investment demand supports the outlook for further growth. On the other hand, this was offset by a sharp rise in imports of 8.2% year on year. Imports grew at the strongest pace since 2021, fostering a negative contribution of foreign trade to GDP growth. Import growth thus exceeded export growth (5.8% year on year), which also accelerated slightly and reached the highest rate in three years. In addition to foreign trade, a further decline in inventories was another negative factor, reducing overall GDP growth by half a percentage point.
On the supply side, gross value added growth was again driven by all sectors, with value added growth easing only in industry, construction and trade.
The results for Q1 were below the CNB forecast, with the sharp increase in imports being the main source of surprise. By contrast, growth in household consumption and fixed investment remained solid. We had expected the economy to grow by 2.5% this year, but the somewhat weaker outcome for Q1 and the risks of adverse effects of high energy prices in the rest of the year increase the likelihood that final GDP growth will be lower.
Petr Sklenář, Executive Director of the Monetary Department
prices of 2020 (chain-linked), seasonally adjusted