2025 Economic Outlook: Real Wage Growth to Slow Despite Overall Improvement

The coming year promises a mixed bag of economic developments for Czech households, with experts projecting a more favorable outlook for family budgets compared to 2024. While most households can expect income improvements, the pace of real wage growth is set to decelerate.

According to Petr Dufek, chief economist at Banka Creditas, consumers will face moderate increases in utility costs, including water and heating. However, inflation should remain controlled thanks to the Czech National Bank’s measures. Service prices are expected to rise, particularly in tourist areas and sectors with limited supply, such as skilled trades.

The housing market continues to present challenges, with property prices expected to rise further, especially in major cities. While mortgage rates might see a slight decrease, housing affordability remains a significant concern.

Economic growth forecasts remain modest, with GDP expected to expand between 1.5 and 2 percent. Miroslav Novák from Akcenta notes that households will likely maintain cautious spending habits as real wage growth slows and the job market cools.

On the employment front, the minimum wage will increase to 20,800 CZK, benefiting approximately 120,000 workers. Public sector employees will also see improvements, with teachers receiving a 7% tariff increase and other state employees getting a 1,400 CZK raise.