Czech GDP growth surges: Consumer spending affirms economic health

The Czech economy grew by 2.8 percent year-on-year in the third quarter of 2025, according to revised estimates from the Czech Statistical Office (ČSÚ). The rise was slightly above the preliminary October estimate of 2.7 percent annual growth.

Household consumption emerged as the main driver, supported by both domestic and foreign demand. Compared with the second quarter of 2025, Czech GDP rose by 0.8 percent.

“The revised estimate confirms continued growth in the Czech economy. GDP, adjusted for price effects and seasonality, increased 0.8 percent from the previous quarter and 2.8 percent year-on-year,” Vladimír Kermiet, director of national accounts at ČSÚ, said in the revised report.

The data indicates a balanced growth across all demand components. Czech National Bank forecasts now point to an annual GDP rise of around 2.5 percent, up from its previous 2.3 percent projection.

“Overall results show domestic economic growth gaining strength,” Petr Sklenář, head of ČNB’s monetary section, told Czech News Agency, noting that all sectors contributed positively. Other economists highlighted the upward revision as a positive signal.

“Quarter-on-quarter growth of 0.8 percent is strong and suggests the Czech economy is heating up above its potential. Household consumption dominates, but investments are also developing steadily,” said Vít Hradil, chief economist at Investika. He also noted that foreign trade contributed positively despite challenges in Germany.

Gross value added rose 0.9 percent quarter-on-quarter and 2.8 percent year-on-year, with most sectors performing well. Construction saw the strongest growth at 4.2 percent, followed by information and communication activities at 2.0 percent, while industry remained largely flat.

On an annual basis, trade, transport, accommodation, and hospitality sectors grew 3.4 percent, construction 9.7 percent, and information and communications 7.5 percent.

Public investment projects in infrastructure were a key factor behind rising capital formation. “Investments are growing mainly thanks to public infrastructure projects that have put the construction sector into a boom phase, while private-sector investment remains subdued,” said Petr Dufek, chief economist at Creditas Bank.

The robust performance signals strong domestic demand and resilience in key sectors, which could influence future policy decisions. High household consumption combined with steady public investment suggests a balanced growth pattern, reducing the risk of overheating.

Analysts say the healthy GDP figures reflect an economy that is not only expanding but also maintaining stability. Continued growth in construction, trade, and services could underpin labor markets and consumer confidence into 2026.

Officials expect monitoring to continue through the year, with upcoming fiscal and monetary measures potentially adjusting to sustain growth. Observers will also watch how external factors, including Germany’s economic performance, affect trade and investment trends.

Looking ahead, policymakers and businesses alike will focus on sustaining momentum, particularly in consumer-driven sectors, while exploring ways to encourage private-sector investment to complement public projects.